ETF Portfolio Strategies
Building an ETF portfolio doesn't have to be complicated. Simple, low-cost strategies often outperform complex ones.
The Three-Fund Portfolio
One of the most popular strategies: Total U.S. Stock Market ETF, Total International Stock ETF, and Total Bond Market ETF. Adjust the percentages based on your age and risk tolerance. It's simple, diversified, and low-cost.
Rebalancing
Over time, your portfolio drifts from your target allocation as assets grow at different rates. Rebalancing means selling winners and buying losers to return to your targets. Many investors rebalance annually or when allocations drift 5%+ from targets.
Dollar-Cost Averaging
Instead of investing a lump sum, invest a fixed amount regularly (e.g., $500/month). This reduces timing risk and takes emotion out of investing. You buy more shares when prices are low and fewer when high—averaging your cost over time.
- Simple three-fund portfolios are effective and easy to manage
- Rebalance periodically to maintain your target allocation
- Dollar-cost averaging reduces timing risk and builds discipline
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