NEW YORK (ETF Expert) -- Recently, one of my clients referred a friend to Pacific Park Financial. The elderly gentlemen came to my office with a familiar dilemma. Specifically, he struggled to see the value of holding different asset classes in his portfolio.
His investments had appreciated nicely over the years. What's more, he was proud of the fact that a 65% allocation to income assets had helped offset the severe setback that growth assets experienced in the 2008-2009 financial collapse.
Nevertheless, he couldn't shake the feeling that "buying and holding" popular asset groups was starting to fail him.
Without knowledge of the particulars, my guest had stumbled onto an inconvenient truth; that is, the Federal Reserve's quantitative easing program forced investors to move money to destinations that they ordinarily would not have considered. Moreover, the ever-changing uncertainty surrounding the future of the central bank's dollar printing and subsequent bond buying may be minimizing the benefits of spreading one's money across asset types.
|Does It Makes Sense to Diversify My ETFs?|
|Approx 6 Months|
|Vanguard Total Stock Market (VTI)||16.6%|
|S&P SPDR Trust (SPY)||16.1%|
|iShares Russell 2000 (IWM)||20.5%|
|Vanguard REIT (VNQ)||8.6%|
|Vanguard Europe (VGK)||8.8%|
|iShares Emerging Markets (EEM)||-7.4%|
|Greenhaven Continuous Commodity (GCC)||-9.0%|
|PowerShares Preferred (PGX)||0.6%|
|SPDR Barclays High Yield Bond (JNK)||1.7%|
|iShares Investment Grade Corporate (LQD)||-3.2%|
|iShares Barclays 7-10 Year Treasury (IEF)||-3.0%|
|Equal Weight Total||3.4%|
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