Best ETF Articles: Well They Were At One Point
There's a lot of good investing content out on the web be it in the form of traditional articles or on blogs. Today, I look at two commentaries that I've found to be very informative.
The One Decision ETF Portfolio
Dr. Marvin Appel presents the The One-Decision ETF Portfolio. In his article he describes a portfolio of exchange traded funds (ETFs) that he considers to be well diversified. In addition, his analysis indicates that this portfolio performed better on a risk-adjusted basis than the S&P 500. Finally, the best selling point for individual investors is that the only upkeep needed is to rebalance the holdings every year and one day. His recommended portfolio consists of:
- 20% in S&P 500
- 20% in REITs
- 10% in small-cap value
- 20% in investment-grade bonds
- 30% in cash (90-day U.S. Treasury bills)
He also explains that international holdings have been purposefully excluded because of historically low returns relative. Although I've pieced together my own portfolio, I consider it educational to examine the reasoning behind other investor's recommendations. Be sure to check out the full article.
Equal Weight ETFs vs. Capitalization Weight ETFs
Robert F. Keane of Investment Advisor describes how Equal Weight ETFs Seek to Reduce Single-Stock Risk. I have to admit that the on-going debate of whether capitalization-weight ETFs are better or worse than their equal weight ETF counterparts. Some of my current investment decisions implicitly support the case for equal weight exchange traded funds. That is, the reason why I invest in the large, mid, and small capitalization ETFs rather than in just a blend of the three as represented by the S&P 1500 is because I know that the large-cap stocks would shadow any possible performance of the small-cap stocks.
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