Easter is here and hints of spring are in the air. It might also be time to do some spring cleaning in your investments and check out if your exchanged traded fund (ETF) portfolio has too many eggs in one basket.
One of the most important aspects of a long-term ETF portfolio is diversification. By creating a mix of assets, one can better prepare for market swings and help mitigate any large losses. [Rebuilding Your Nest Egg With ETFs.]
Here are a few tips to see if your ETF portfolio covers the investment spectrum:
- Hold a diversified stock fund or ETF rather than a single stock
- Investing in international ETFs can give you global diversification and insulate you better from trouble at home.
- Don’t forget to rebalance, especially after big market moves, to bring the initial allocations back in line. [5 Things to Avoid When ETF Investing.]
- Diversify in other asset classes, too, such as in bonds or domestic stocks; for example, don’t put your entire domestic exposure in large-caps. Spread it out a little.
- Allocate some of your portfolio to commodities, bonds and real estate when appropriate, too. [7 ETF Rules to Mind.]
Tisha Guerrero contributed to this article.
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.