I’m Keith DeGreen and this is your Investors Minute.
Exchange-traded funds are passive investments. They’re designed to faithfully track the price performance of an underlying index like, say, the S&P 500.
So why not just buy ‘em and forget ‘em? Well, there are now about 1400 exchange traded funds in the U.S. with many variations. They track everything from large well known U.S. indexes to lesser-known foreign, or sector indexes.
Indexes rise and fall in value just like stocks. We can use hard-nosed valuation techniques to rotate toward the most promising indexes, and away from the least promising, or even to cash if nothing looks good.
So ETFs are like all those apps you have on your phone or computer. They’re all cool, but it takes an operating system – professional management – to make them work seamlessly together.
FEE-ONLY DeGreen Capital Management. Pioneers in low-cost exchange-traded fund investing. Irvine: 949-333-4550. Scottsdale: 480-609-9900. Minimum portfolio requirement $1,000,000.
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