- This topic has 2 replies, 2 voices, and was last updated 4 years, 9 months ago by Jay.
April 22, 2015 at 2:58 pm #16426JayGuest
I was just curious what everyone’s opinion is of this article posted on MSN. It lists the below ETFs and gives what sounds to me like sound reasoning. However, I am just starting to do my homework for investing outside of the TSP so it could be pure malarky for all I know.
1. SPDR S&P Biotech ETF
2. Guggenheim S&P 500 Equal Weight Technology ETF
3. Vanguard Dividend Appreciation ETF
4. Vanguard Total International Stock ETF
5. iShares U.S. Preferred Stock ETFApril 25, 2015 at 7:35 pm #16439TS PaulKeymaster
Just my opinion, for what it is worth: I don’t think any of the ETFs listed are bad investments if you want to concentrate on one of those specific sectors, but I don’t like that combination for my entire non-TSP portfolio. Buying those ETFs would concentrate the majority of your investments in biotech, tech and banks which seems very limited to me.
The Biotech and Technology ETFs both look great if you want to invest in those areas, but those are both sectors which are notorious for bubbles and corrections, so it will be a wild ride.
I’m not a big fan of the Dividend ETF offered in the article. 2.1% is a very low yield and I’d rather go find some higher yielding individual stocks.
The international fund is fine, but is so diversified it is going to get very average returns. My international investing tends to be market specific based on what is undervalued at any given time rather than just buying a bit of everything in the world.
And the preferred stock ETF is really just a bank/financial sector ETF.
Again, probably some very good choices for sector specific investments, but I wouldn’t choose that basket for all of my investments.
Thanks very much for sharing and starting the discussion.
The TSP Allocation Guide www.TSPallocation.comApril 29, 2015 at 9:54 am #16454JayGuest
So it sounds like some of those are decent investments, but the premise of the article stating you only need those 5 is probably oversimplified.
I am curious as to how people generally start out with non-tsp investing with regard to diversity. More specifically, do you wait to accumulate enough capital to invest in many different sectors, or do you recommend adding to your portfolio gradually?
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