FYI: Mike Loewengart of E-Trade discusses equal-weighted and bond ETFs, and actively managed funds for diversification.
Investors are often told to diversify and choose low-cost index funds or exchange traded funds (ETFs).
Still, the S&P 500 Index is weighted by market capitalization and a volatile October emphasized how much risk was concentrated at the top. So what’s an investor to do?
Mike Loewengart, E-Trade’s vice president for investment strategy, outlined ways to diversify while lowering your portfolio risk at a relatively low cost.
One could argue that the S&P 500 SPX, -0.76% is diversified because it includes 500 companies. However, its market-cap weighting concentrates risk in large companies, many of them in the technology industry.
Regards,
Ted
https://www.marketwatch.com/story/heres-how-to-easily-reduce-your-investment-risk-just-at-the-right-time-2018-11-07/print
