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Do ETFs Belong in Your Portfolio?

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My quick answer is no. Because everywhere I turn there’s yet another ETF being formed and an article espousing their benefits. And with Wall Street firms plastering their names on all sorts of ETFs, the landscape has become littered with products that would feel more at home on the Vegas Strip. Investors be warned: Passive investing basically guarantees benchmark returns. Make sure your portfolio doesn’t rely too much on the wrong measuring stick.

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As Robert Powell reports in USA Today, it’s also a good idea to avoid newly launched ETFs:

Well-known, long-established indices are better than obscure indices, the more assets under management the better, and the more trading volume the better. As a general rule, ETF experts generally advise against investing in newly launched ETFs.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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