Sunday, April 28, 2013

All ETF Strategy for Two Retirement Accounts

In Using an ETF Portfolio, I wrote that I was considering using no commission ETFs to build a diversified portfolio in one of my retirement accounts.  I've now decided to proceed with two retirement accounts.  Here are my reasons:
  • Simple strategy.   I can create a diversified portfolio with as little as four ETFs, at specified percentages with periodic rebalancing.  Thus, anyone can manage and rebalance the portfolio, and a professional is not needed to manage the account.
  • Cost effective.  With no commission costs and low expense ratios, the ETFs are an inexpensive way to have diversified investments.  In addition, it is also cost effective to buy on dips to dollar cost average the basis lower.
  • Less effort. Trading stocks is effort intensive, requiring screening and evaluating numerous stocks to find a select few to trade.  This is a constant on-going process.  By investing in ETFs, I focus on a few indicators or rebalancing to determine when to increase or reduce exposure in equities.
  • For now, I will start the all ETF portfolio with the next market correction.

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    This is not financial advice. Please consult a professional advisor.

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