The Vanguard MSCI EAFE ETF (NYSEArca: VEA) provides diversification into developed economies outside the U.S. The ETF will help capture the upside once Japan and Europe solve their problems. The holdings currently trade at an average 11 times estimated 2013 earnings, compared to the S&P 500 at 13 times.
For the bond investors, Goldberg suggests looking at the Vanguard Intermediate-Term Corporate Bond ETF (NYSEArca: VCIT), which holds a portfolio of investment grade single-A bonds. VCIT has a 2.5% yield. However, if interest rates on similar bonds rise by 1%, the ETF could drop 6%. As interest rates hover around historical lows, it is more likely for yields to rise than fall.
The iShares S&P National AMT-Free Municipal Bond (NYSEArca: MUB) provides a tax-free option. Although, the ETF only yields 1.5%, or equivalent to a 2.2% for a taxpayer in the 35% bracket. If interest rates rise 1%, the fund may also decline 6%. [Muni Bond ETFs: Year in Review and 2013 Outlook]
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Max Chen contributed to this article.