I’m often asked to recommend a simple index fund portfolio for people who are just getting started with passive investing and want to learn the basics. There are several good portfolios you can build to suit your needs using a few funds that require little maintenance. Balanced index funds are also a good option for people who don’t want to do any maintenance.
Probably one of the biggest investment concerns today is the so-called “bond bubble.” Interest rates are at an all-time low thanks in part due to Central Bank bond buying and weak demand for borrowing in this slow growth economy. The fear of owning bonds has hit an unprecedented — and in my view, unwarranted — level. There is a good reason to own bonds in a portfolio.
I was having a cup of coffee at the local java shop and overheard a guy talking with his friend about investing. It went something like this, “Just about the time I started making money, the system screwed me.” Wow! This is too good to mind my own business. I leaned in a little closer… [...]
People can’t predict markets but markets can predict people. Forecasts about future economic growth have no impact on the future performance of the stock market while the past performance of the stock market has an impact on what forecasters believe about the future.
Exchange-traded funds (ETFs) are mutual funds that trade on a stock exchange. For many years, all ETFs were index tracking products. The first ETF to not follow an index was launched in 2008. Today, there are 60 actively-managed ETFs listed in the U.S. and many more pending. To avoid confusion, I propose referring to index products as ETIFs and active products as ETAFs.