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February 27, 2015
Successful ETF Investing

Successful ETF Investing
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February 27, 2015
Weekly ETF Report

How Risky are ETFs? As a newsletter writer and as an investment advisor who advocates the use of exchange-traded funds (ETFs) as the best tools to get all types of asset-class exposure, I am often asked about the risks associated with such funds. Just how risky are ETFs, and what do you need to know about this risk? The short answer is that ETFs generally offer more diversification than buying individual stocks. They also offer lower costs than owning mutual funds. So, the only real risk with ETFs is the risk that’s assumed whenever you invest in any equity, bond, commodity or any other asset class. Of course, not all asset classes or indices are created equal when it comes to risk. There are many market sectors that are far more risky, historically, than others. In today’s ETF University podcast, I go over many of the trends and circumstances that cause certain areas of the market to be riskier than others. I also show you how to control that risk with ETFs designed to help adjust for circumstances such as currency risk. Now, if you haven’t checked out ETF University, or simply ETFU.com, then this is a perfect opportunity to do so. And, it is not just risk that you’ll learn about. The following table shows all of our previous podcasts, along with their respective titles, so you can listen to the topics of greatest interest to you. #1 11/7/14 Case Against Mutual Funds #2 11/14/14 Choosing a Brokerage Firm […]

February 20, 2015
Successful ETF Investing

Successful ETF Investing
Subscribe Today

February 20, 2015
Weekly ETF Report

The Smartest Investors use Smart-Beta ETFs What’s the biggest trend in ETF land these days? It’s called smart-beta ETFs. These ETFs provide a twist on traditional indexed ETFs, and they’re an interesting alternative to traditional, market-cap-weighted index funds. One of the most common types of smart-beta funds are those that offer equal weighting, meaning each stock counts the same in an index. Funds such as the Guggenheim S&P 500 Equal Weight ETF (RSP) invest in the same companies as the traditional market-cap-weighted S&P 500 index, but unlike the market-cap-weighted index, RSP doesn’t weight the likes of Apple or Microsoft more than smaller index components. By equal weighting, the smaller-cap, lesser-known S&P 500 companies get treated the same as Apple, which now is the largest component of a market-cap-weighted S&P 500 fund. Another type of smart-beta fund is one that siphons out volatility, such as the PowerShares Low Volatility ETF (SPLV). By holding the stocks with the least volatility in the S&P 500, this fund allows more conservative investors to sleep just a little bit better at night. The popularity of smart-beta funds of late has really been a notable trend in the market. In fact, about 60% of capital flowing into ETFs during the past couple of years has gone into some sort of smart-beta fund. That, my friends, is a smart trend that I think will continue for some time. So, be smart: use smart-beta ETFs. ETF Talk: An Alternative Way to Invest in Emerging Markets Investing in overseas […]

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Are ETFs Riskier than Other Investments?

February 27, 2015

How Risky are ETFs? As a newsletter writer and as an investment advisor who advocates the use of exchange-traded funds (ETFs) as the best tools to get all types of asset-class exposure, I am often asked about the risks associated with such funds. Just how risky are ETFs, and what do you need to know about this risk? The short answer is that ETFs generally offer more diversification than buying individual stocks. They also offer lower costs than owning mutual funds. So, the only real risk with ETFs is the risk that’s assumed whenever you invest in any equity, bond, commodity or any other asset class. Of course, not all asset classes or indices are created equal when it comes to risk. There are many market sectors that are far more risky, historically, than others. In today’s ETF University podcast, I go over many of the trends and circumstances that cause certain areas of the market to be riskier than others. I also show you how to control that risk with ETFs designed to help adjust for circumstances such as currency risk. Now, if you haven’t checked out ETF University, or simply ETFU.com, then this is a perfect opportunity to do so. And, it...

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Investors have become complacent. Stocks are near all-time highs. Volatility is low. It's almost like investors are blind to the three coming catastrophes that can crash the market 30% or more in 2013:...
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Fund Allocation
abc
25%
def
25%
ghi
25%
jkl
25%
Name Ticker Date Buy Price Stop Price
number 1 abc 08/30/2009 19.74 17.74
number 2 def 10/13/2009 19.72 17.72
number 3 ghi 05/15/2009 19.35 17.35
number 4 jkl 03/30/2009 20.08 17.08