The Low-Risk “All-Weather” Portfolio

Creating a properly diversified portfolio can be a difficult proposition, especially when interest rates have remained historically low for some time. Now, suppose an investor is interested in that same diversified portfolio but would also like it to outperform in down markets. That’s certainly a tall order. Exchange-traded funds (ETFs) are one way to provide that diversification while reducing costs compared to other investments. Unlike mutual funds, ETFs will trade like stocks on an exchange and will fluctuate throughout the day. Their lower-than-mutual-fund fee structures make them attractive to investors. ETFs can track nearly any market, from commodities to bonds and stocks, providing extra diversification.