Not exact matches
Another factor in
stock selection is the level of
exposure to the domestic
market you
want.
With the new change
to our
stock market timing model, we
want to continue building our long
exposure as new, low - risk swing trade setups develop.
For investors who
want to maintain equity
exposure but are concerned about overall equity
market volatility, less volatile dividend
stocks may offer an attractive alternative.
If you
wanted market exposure in, say, five different sectors, you'd have
to buy
stock in companies in each of these sectors.
So while you probably don't
want to dump all your
stocks because we are still in the midst of a bull
market, you probably do
want to shift your
exposure to protect yourself from the coming decline in equities.
So we
want to make sure people are differentiating between alpha which could be skill based, but beta which just is a systematic
exposure to a common factor and doesn't involve any individual
stock picking, nor really any
market timing either.
E-minis are a fantastic instrument if you
want exposure to large - cap companies on the US
stock market.
Most retirees should have limited
exposure to the
stock market, so if you're a retiree with a high percentage of your portfolio in equities, you may
want to sell some of your
stocks and add more Canadian bonds.
Ideally, you
want to choose a combination of low - cost funds that will give you
exposure to stocks of all types and styles (domestic, foreign, large, small, growth and value) as well as bond funds that track the broad investment - grade bond
market (government and corporate issues in a range of maturities).
While I have no problem with going all - index — a total U.S.
stock market fund for broad domestic
stock exposure, a total U.S. bond
market fund for your bond stake and a total international fund if you
want to include foreign shares in your asset mix — I don't contend you would be totally undermining your investing efforts if you throw in the occasional actively managed fund, provided it has low expenses.
Buying individual common
stock is the most obvious choice if you
want immediate
exposure to the
stock market.
Canadians
wanting to get
exposure to the US
stock market through an ETF have a range of options.
I'd be worried if she
wanted to try
to achieve her retirement goals with a lower allocation
to stocks because I think she needs
stock market exposure to ensure her money outlasts her, despite her stated intention
to spend it all.
The other International
stock ETFs in the initial line - up are likely
to be disappointing for investors
wanting currency unhedged
exposure to US and EAFE
markets.
Vanguard and I would generally prefer a total
stock market index fund
to an S&P 500 index fund, because we
want some
exposure to small - cap
stocks, but the difference is immaterial compared
to high - cost actively managed funds.
You will likely
want exposure to all three categories, whether you're buying U.S.
stocks or investing in developed foreign
markets.
For those who
want to avoid timing the
markets or lack
stock specific insights, index investing enables
exposure to the sector and related returns via a rules based approach provided by an independent index provider.
For investors who
want to maintain equity
exposure but are concerned about overall equity
market volatility, less volatile dividend
stocks may offer an attractive alternative.
I'm not that interested in indexing, although for individuals who
want completely passive
exposure to stocks, value weighting certainly makes much more sense
to me than
market weighting (because
market weighting systematically buys more of a
stock as it goes up, thus forcing you -LSB-...]