ETFs are the greatest invention since sliced bread. (Or at least since mutual funds.) With one move traders can buy a basket of FANG stocks (Facebook, Amazon, Netflix, and Google) or Internet security stocks (HACK.) Investors putting together a retirement portfolio can buy all of the S&P 500 with a single purchase. So-called passive portfolios built on passive ETFs have attracted hundreds of billions. But passive ETF portfolios still face an important hurdle: How do you pick which passive ETF to buy and then hold. And when. In 2017 through September 8, for example, an S&P 500 ETF returned 10.3%. One invested in the small company stocks of the Russell 2000 returned just 3.2%. And one invested in the tech-heavy NASDAQ returned 14.2%. Don't know about you but to me those are significant differences. My Perfect 5 ETF Active Passive Portfolio is designed to take advantage of the benefits of ETFs--low costs and the ability to trade entire sectors or markets with one decision--and add just a tablespoon of active management into a passive ETF portfolio. The five slots of the portfolio are dedicated to five markets; my advice in this Webinar and on my JubakAM.com site will tell you how to rotate specific ETFs in and out of those slots to beat the returns generated by a purely passive ETF portfolio. To give you an example, the weak U.S. dollar says, to me, that your U.S. stock slot in this portfolio should be filled, as of this fall, with an S&P 500 ETF since the bigger companies in that market export more and are therefore better suited to take advantage of a lower-priced dollar. You can follow my continuing recommendations for this portfolio at JubakAM.com.
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