Bond ETF Investing Warrants Caution

Lowell Herr submits: Having mastered "The Golden Rule of Investing" (save as much as you can as early as you can), how does an investor go about constructing a beginning portfolio? This is a familiar question from young and not so young prospective investors. Below is a starter portfolio using ten ETFs that cover the domestic and international markets.The basic ETFs for this beginning portfolio are the following:

By Lowell Herr: While the following portfolio was not initially set up to follow any type of risk reduction model, the portfolio described below is an excellent candidate for such a model.

By Lowell Herr: Basic financial principles require that long-term investment portfolios exhibit diversification, include potential inflation and deflationary holdings, but still have an equity orientation. The following 20-ETF portfolio meets these requirements although the portfolio is unlikely to hold inflation and deflation securities at the same time.

By Lowell Herr: In response to a user request, below are the individual "Delta Factor" projections for twenty ETFs frequently used in one of more of the portfolios tracked here at ITA Wealth Management. Neither the Delta or Delta Factor columns are heavily populated with green or Buy recommendations. Five years of data were used so this puts the beginning period back in the middle of the last major bear market.

MyPlanIQ submits:As we pointed out in our previous article, one can vary along three dimensions in fixed income investing: Interest rates (long vs. short maturity), credit (high yield or junk vs. investment grade) and international (vs. domestic). The following table shows the trend scores across various bond ETFs.

By Lowell Herr: Several days ago, I published "Delta Factor" projections for a number of bond ETFs common to investors who use bond ETFs in their portfolios. Before discussing similar projections for international ETFs, allow me to digress and explain the general ideas behind the "Delta Factor."

By Scott's Investments:Last week I detailed an ETF portfolio (part 1 and part 2) intended to mimic PRPFX, the Permanent Portfolio mutual fund.

By Lowell Herr: Market volatility over the last several years is pushing me toward reconsidering a buy-and-hold strategy. In an effort to lower portfolio volatility, I am testing a "risk reduction" model and part of this experiment is to better understand when particular asset classes are fairly valued.