People who are saving toward retirement have increased allocation to equities to squeeze out returns in a low-yield environment, but this has opened many to greater risks.
Nevertheless, ETF investors saving toward retirement may still maintain their equity exposure but they should also consider some other options as well.
In a prolonged equity market rally, valuations are beginning to look pricey. Consequently, some financial advisors and strategists advise investors to look to more stodgy company stocks with more staying power.
“Investors who want to preserve and grow capital patiently don’t need to hit home runs,” Scott Clemons, chief investment strategist at Brown Brothers Harriman, told the Wall Street Journal.
Dennis Notchick, an adviser at Safeguard Investment Advisory Group, argued investors should consider companies with strong cash flows that boost dividends provide a good buffer in a rising rate environment ahead.