User 5682

Building An All-Seasons Tech ETF Portfolio

I looked into the income ETFs but didn’t find as much opportunity to apply this sort of analysis. You do have a wide range of covariances, etc. but there’s more predictability here. If you expect rates to fall, longer-term instruments tend to outperform, etc, etc.

Seems to me, at least so far, that if you can correctly guess which way rates will go, pick one appropriate fund; that should do it. For those who are completely undecided, just stick with a middle of the road fund.

That said, I’m not sure any of these approaches are quite up to what one might accomplish with a good income-stock screen. In theory, higher yield means higher risk (dividend cut and/or poor growth), but from what I’ve been seeing, the market’s worries often tend to be disproportionate to real business threats. If you do a seekingalpha ticker search on WMT, you’ll see something I wrote in the past week on strip-mall REITS that look better the more Wal-Mart struggles; you have some nice yields there.

Building An All-Seasons Tech ETF Portfolio

Mick, good question.

If one determines ahead of time that it's to be semis, yes, SMH should be in the mix. But if one is looking for a diversified ETF portfolio, SMH, which strictly speaking is not en ETF but a HOLDR, might cause awkwardness since, as with all HOLDRs, purchases must be made in 100-share increments. Therefore, it may not mesh with allocation preferences. This may or may not be an issue, depending on the size of the portfolio ($ per security) and how firm one's convictions are regarding asset %s.