Simple Steps to Building an ETF Portfolio

With a low cost structure, transparency and tax efficiencies all gained from owning exchange traded funds and with more than 900 ETFs to choose from to build a diversified ETF portfolio, now more that ever it’s time to get started. If you are still not comfortable investing all your assets in ETF’s, then just get started with a small portfolio with plans to possibly add to it over time.

Your first step is to create a portfolio with an asset allocation accounting for risk and time frame. Once this bond-to-equity ratio is determined, you will build a portfolio with adequate diversification with anywhere from 5-10 ETFs, across several asset classes. . You are almost done. Your last step to get started is actually buying the funds – your discount broker can help you with that.

With that all done, you are well on your way. As the market shifts, so will your balance of stocks to bonds. Frequent rebalancing will keep your portfolio in line, an important step not to be forgotten.

In time, this passive investing strategy I hope will serve your core assets well.