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If a specific sector has performed exceptionally well, it may now take up too large a percentage of your portfolio. Selling a portion allows you to reinvest in underrepresented areas to maintain your target risk level.
Investors must decide between passive ETFs (which track an index) and active ETFs (where managers pick stocks).
Unlike mutual funds, which price once a day after the market closes, ETFs trade on public exchanges throughout the day. This provides investors with "intraday liquidity," meaning you can react to market news in real-time. Whether you are looking to track the S&P 500, invest in renewable energy, or gain exposure to gold, there is likely an ETF designed for that specific purpose. How to Buy: The Entry Strategy
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Selling an ETF is often driven by one of three goals: rebalancing, profit-taking, or tax-loss harvesting.
