March 30, 2009 at 12:00 pm by Tom Lydon
As you build your retirement portfolio with exchange traded funds (ETFs), do you know where your focus should be?
The focus when using traditional ETFs in a retirement portfolio is in the area of growth, reports Ed McCarthy for Research Magazine. I focus on growth and peel back income as it’s needed, rather than at these drastically low income levels, trying to squeeze as much monthly income out of the products themselves.
Whether you’re a new investor, or one who’s built a portfolio and living off it in retirement, the advice to have a plan and a strategy still applies.
The approach is tactical, and we use a fund’s 200-day moving average to recognize a security’s underlying direction. If you put a 200-day moving average on an ETF, it is easier to catch those areas that happen to be trending in the right direction and and avoid them when they go below the 200-day moving average and the trend is non-existent.
The fixed income area is a good example of this. Bonds, both government and corporate, were decimated last fall. If you followed the 200 day-moving-average as a rule, it would have been largely avoided.
Learn more about investing in ETFs and strategies you can use by checking out our education page. There are dozens of articles in there, ranging from ETF 101 to how to use and manage your funds.
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