Paul Meisel

The One-Decision ETF Portfolio

This is very useful to those who wish to avoid a lot of research, and cannot follow or invest in many different securities.

Using intuition and heuristics, I recently came up with something similar but slightly different for my children, who are starting Roth IRAs with small investments. Because they are looking at 4 digit investments, it is not practical for them to invest in 5 or 10 different issues, nor do they wish to follow them closely. So I came up with the following:

50%-80% Large cap dividend ETF (FDL);
20%-50% Russell 2000 Index (IWN).

The weightings are approximate; to minimize transaction costs I will purchase for them only one of the two ETF's on most deposit events. I intend to follow this strategy until they have perhaps $10,000, although I will reevaluate the strategy along the way.

I admit to a bias towards equities and away from bonds and REITS -- partly because of a hangover from reading Peter Lynch, and partly due to the age of my children (between 18 and 21).

I find it comforting when rigorous quantitative analysis (which I have the talent, but not the patience, for) arrives at conclusions that match those I reach with intuition and heuristics. This could be "great minds think alike" or "you can tell a person's intelligence by the degree to which his prejudices match your own..."