The EZ Approach to ETF Portfolio Building

Pretty boring. I have a lot of ETFs and none of yours. I have SDY, XLP, XLU, DVY, AMLP, PFF, PMM, JTP, JNK. Not sure what you're trying to do but I'm interested in capital preservation, income and growth.

posted about 1 year ago by Patrick from Illinois

Clear and plain advice for building a solid core portfolio at rock-bottom cost. Allocation decisions based on time-horizons and risk tolerance are of course the next step. A simple guide to allocation decision-making would be good topic for a follow-on article.

posted about 1 year ago by Daniel from Alabama

Far too many...over diversified. Can you narrow it down to five?

posted about 1 year ago by Steven from Georgia

This is a good introduction for easy investing using simple building blocks to achieve an investors asset allocation model.

posted about 1 year ago by Darrel from Washington

what about bonds other than u.s. govts?

posted about 1 year ago by Philip from Connecticut

Thank you. This helps me tremendously. I've been flip flopping in the market with stocks. I like the protection of diversification in both the etf's and funds. I will apply it for 2012.

posted about 1 year ago by Judy from North Carolina

I agree that this is a useful start, but there should be more research done to find dividend paying ETF's.
Dividends are the key to generate income during low interest rates from other sources.

posted about 1 year ago by Peter from Florida

Why is AII directing us to an article written in 2005 when 2012 is one week away? Things changes, such as global financial factors, global debt wories etc.

posted about 1 year ago by Kent from California

I agree with Peter's comment. Many thanks for your effort helping us investors.

posted about 1 year ago by Efren from Louisiana

Yes, this is a VERY dated article. There are now municipal bond ETF's and I would argue that currently the best total international core ETF is from Vanguard (VXUS), which includes large, medium, and small companies from both developed and emerging markets.

posted about 1 year ago by CWG from Virginia

The PDF download is dated October 2005, perhaps that should have been noted in the online reprint. That wouldn't detract from its value, it would present a "full and honest disclosure" attitude.
Bruce Osterberg

posted about 1 year ago by Bruce from California

This sounds like a good start, but it would be useful to have some ideas about capital allocation and portfolio rotation. I am surprised in not seeing some heavyweights such as: GLD (gold), USO (oil), EEM (emerging markets), ICF (REITS)... Maybe in the next article? Cheers.

posted about 1 year ago by Fab from Illinois

I have a good selection of 5 Vanguard funds and recently have added 3 Vanguard ETF's. There is not too much overlap in the funds. The real question to me is whether to shift to all ETF's? They are all in an IRA so taxes are not currently an issue.

posted about 1 year ago by F from Virginia

Some good suggestions in the article. I like having a REIT ETF (Vanguard VNQ) for additional diversification. Peter may like SDY as a dividend paying ETF. How about an update to the article with the inclusion of more recent ETFs?

posted about 1 year ago by Tom from North Carolina

Investing principles may be unchanged, but the world picture and economic conditions are clearly different than they were in 2005. An updated list of ETF's is clearly needed.

posted about 1 year ago by Thomas from California

already 0posted

posted about 1 year ago by Judy from North Carolina

I have had moderate success by rotating in and out of some ETFs. I couldn't do that with mutual funds so I sold my last one in 2011. My portfolio has 14 ETFs, four are on table two. While the article may be dated, its basic premise is still valid. Complexity can be a burden.

posted about 1 year ago by George from Florida

I recommend anybody who wants to follow something like this read "The Ivy Portfolio".

To summerize. Domestic (SPY), International (EFA), Mid-Term Bonds (IEF), Commodities (DBC), Real Estate (VNQ).

Check monthly. 20% of portfolio to each and get in when above 10MMA and out when below.

posted about 1 year ago by Michael from Georgia

This was written in 2005...PLEEZE!!!

posted about 1 year ago by Barbara from Georgia

Want to keep it really simple and really cheap (no cost)? Stick with all Vanguard ETFs. Go to etfscreen.com to track relative strength trends and re-allocate as rotations occur as often as you choose.

posted 7 months ago by Francis Robinson from Virginia

Sometimes index mutual funds have low expenses, too. I like.

VTIAX
Vanguard Total International Stock Index Fund Admiral Shares

VFIDX (I'm not a huge fan of govt bond funds)
Vanguard Intermediate-Term Investment-Grade Fund Admiral Shares

XLU
SELECT SECTOR SPDR TRUST SBI UTILITIES OR
XLU
SELECT SECTOR SPDR TRUST SBI UTILITIES

and of course
VWIUX
Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares as well as buying individual muni bonds held to maturity if you muni bond portfolio is > $100,000

posted 7 months ago by T Ibbs from Florida

You left out the 2nd largest ETF and a whole asset class.

GLD

posted 7 months ago by Bedford Joyner from Tennessee

Israelsen 7Twelve is a portfolio proposed by Craig L. Israelsen, Ph.D.. Another is the lazt ETF portfolio by David Swensen, the Yale Endowment Manager which has about 6 ETFs in the portfolio. These and other "lazy" portfolios provide better returns in the long run than actively managed mutual funds and only need to be rebalanced one a year

posted 7 months ago by Robert Mclaughlin from Virginia