Using exchange traded funds (ETFs) in a portfolio can help empower individual investors build diversified, flexible portfolios. How many ETFs can give those results? The answer is purely subjective. It depends on what the investor is trying to accomplish and for which part of the portfolio. Whether the ideal holding is financial or foreign funds, one thing to consider is the benefit of an ETF and its composition or if a single stock is more useful. Some ETFs capture one theme and then reflect a secondary effect. Other segments may be highly desirable but unavailable through an ETF, so a single stock is the only option.

Roger Nusbaum of adds that using ETFs becomes a time-saver. He uses whatever tool is the best way to capture the intended effect and that fits in with anything unique to the individual.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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