Any ETF investors here?

[Ed4252]

Anyone here invested in ETFs? I'm trying to create a small portfolio right now with only like $4000. How diverse is your portfolio?


Right now I'm thinking:


iShares S&P 500 Index IVV 20%
Vanguard Small Cap ETF VB 25%
iShares MSCI EAFE Index EFA 35% foreign
iShares Dow Jones US Basic Materials IYM 10%
iShares Dow Jones US Real Estate IYR 10%

what's your opinion on the allocation and portfolio for the long term (buy and hold strategy for approx 20 years+) I'm not exactly sure which sector funds to get yet.

[JTWood]

PM RugbyD (or Cornbread Maxwell).

[Cornbread Maxwell]

The beauty of Ishares is that you dont necessarily have to have a long term approach - you can move among them easily and cheaply.

Since you are just starting out and probably have a higher risk factor, I'd say your portfolio is probably pretty sound for you. The one glaring mistake is the real estate fund - thats extremely risky right now with the majority of pundits suggesting we are seeing a major bubble in that sector. I would say to feel free to use that 10% more aggressily by riding hot sectors, but I would be extremely cautious of that real estate sector.

If you feel you would rather have a more hands off approach and dont want to be too active, then just scrap that 10% back into the other 4 and leave it at 4 funds. Also - a more common approach is to have at least a small amount (10+%) in fixed income.