“Whenever an asset class does well, that’s when individuals want to buy more,” Vinder said. “And they want to sell what’s doing poorly.”
Vinder points out that bad timing, coupled with high management fees and inefficient tax planning, drags down portfolio returns below that of the S&P 500.
Within a diversified portfolio, the asset manager includes exposure to traditional oversea assets through funds like the iShares MSCI EAFE (NYSEArca: EFA). Emerging market exposure may be accessed through the iShares MSCI Emerging Markets (NYSEArca: EEM) or the Vanguard MSCI Emerging Markets (NYSEArca: VWO). Bond holdings include options like the PowerShares National Muni Bonds (NYSEArca: PZA), iShares iBoxx $ Investment Grade Corporate Bond (NYSEArca: LQD) and the SPDR Barclays Capital High Yield Bond Index (NYSEArca: JNK).
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.