Ask Colin

I am not sure if you have written about this. Whats your opinion on capital preservation with these ETFs, ETPs and Index Funds? Would you set stops like with individual shares?

I have not written about this aspect of investing. Index funds and ETFs (ETPs on the ASX) are in many respects a passive investment, which means buy and hold, collecting dividends and franking credits along the way. They will not be as volatile as individual company shares. However, like all investments in the stock market it is prudent to make capital preservation a key consideration. Markets move in big bull and bear markets and basic charting theory should be employed in the form of stops to protect capital.

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