This year offers financial investors a unique opportunity in establishing a positive diversified index fund portfolio. Mainly, because this is the best possible strategy for investing during 2017, while the world is experiencing a slowing of corporate profits, political volatility, and monumental rises in interest rates. The Fed has been posturing over a few years now, but at each deadline, choosing to extend the grace period before increasing US interest rates, as the rest of the world is moving closer to negative rates. For this reason, investors cannot anticipate when interest rates will begin to climb, so they are considering ITR intermediate corporate bond funds for their inexpensive costs and bond maturity set in one to 10 years.The five exchange traded funds that investors will feel safest with right now include a moderately safe investment strategy using bonds, low volatility investments, exchange-traded funds (ETF’s), offering super low fees, like small caps, with healthcare and biotech stocks.
A diverse bond-fund package that includes bonds like the ITR intermediate corporate bond fund, keeps an investment portfolio safely balanced with duration of an average maturity of five years. Two other Bond options currently being watched are SPDR Barclays Intermediate-Term Corp. Bond, ETF ITR investment grade bonds. Second, a bond from Anheuser-Busch, InBev BUD, maturing in 2021, expected yield approximately 2.65%.
To fend off the fears of present stock market volatility and uncertain financial futures of long term, formally stable corporations, all diversified index fund portfolios must include a percentage of bonds. Pick any decade within the history of the financial investment industry, investors are deeply affected by circumstances of financial uncertainty and volatility. They know their investments might be in danger.
The reason financial planners never guarantee a profit or growth result of specific stocks or investments is because of variables and outside forces that alter any profit prediction at any time. The stock market changes daily and even hourly. Strategies suggested should be studied carefully before an investor makes his or her investment decision according to goals and preferences.
When investors purchase an Index Fund, they are exposed to the entire index. While some stocks may be depreciating, others are appreciating. A primary key to diversification, in a good index fund portfolio, is to diversify in long-term and short-term investments. Looking at long-term goals prevent an investor from panicking about volatility. Focus on long-term growth for retirement income, or children’s college expenses.
With research and reliable historical data, investors often see small companies as having higher growth potential. Small cap stocks are businesses that fit into the $250 million to $2-billion financial range. When the economy begins to expand, and stabilize, small cap investments historically outperform. Investors wanting to avoid foreign stocks, like domestic small businesses for less risk.
The US population will soon be 1/5 Baby Boomers approaching retirement age. The Healthcare Market is a constant, even with the political situation at hand, people will always need medical care. The very nature of the health industry is focused on transparency, so the industry is more predictable. This investment area can be adequately researched to identify growth trends.
Keeping an eye on long-term expectations, the biotechnology industry is always in growth mode making it pretty much recession proof. Whatever might be trending in the economy, progressive scientific discoveries in medicine, environmental solutions, and sustainable product development will always be a staple in our future development. We are constantly focusing on new innovations that might disrupt manufacturing products as possible windfalls when investing.
Investors need to carefully research the performance and experience of financial planners before choosing an advisor. Having some current information about the five exchange traded funds discussed here provides a foundation for good communication between prospective investors and their financial professional. This also allows the investor to take the decision-making lead when developing their diversified index fund portfolio.