Whatever your total allocation to domestic small-cap stocks (see Chapter 21 for advice), I recommend that anywhere from 60 to 75 percent of that amount be allocated to small value. But no more than that, please. If the value premium disappears or becomes a value discount, I don’t want you left holding the bag.

Equal weight means that the ETFs are not “market weighted,” as are the vast majority of ETFs (and mutual funds). So if you look at, for example, the S&P 500 Equal Weight Technology ETF (RYT), you find a portfolio of about 70 company stocks, and very much unlike the typical technology fund, Apple and Microsoft do not dominate the portfolio. Thos

What’s the advantage of maturity-date bond ETFs over other bond ETFs? With most bond ETFs, if there’s a swift hike in interest rates, your fund price could drop overnight. It will then likely rise back up over time, but not if you have to withdraw the money to buy, say, a new car, or pay for your kid’s tuition. In that case, you’re out of luck (and

The ultimate purpose of standard deviation, and the reason I’m describing it, is that it gives you a way to judge the relative risks of two ETFs. If one ETF has a 3-year standard deviation of 12, you know that it is roughly twice as volatile as another ETF with a standard deviation of 6 and half as risky as an ETF with a standard deviation of 24. A

To give me extra exposure to companies that mine for gold and silver, produce oil and gas, and either produce or distribute other commodities, I prefer broader natural resource funds. (I say “extra” because I already get exposure in my other stock funds.) If commodity prices pop, the broader natural resource funds generally do well, and I’m not tak

These large-cap stocks that you’ll find in VTI are value and growth as well as in-between (blend) stocks. If you have a very small portfolio, and you really want to keep things super simple, then VTI (which just celebrated its 20th birthday) is a great ETF to hold. But for most investors, it would be wise to have large-cap stocks separate from smal

If Microsoft stock pays a dividend, you are due a certain amount of that dividend — unless you happen to have bought into a leveraged or inverse ETF.

Vanguard Mega Cap 300 Growth ETF (MGK) Indexed to: CRSP U.S. Mega Cap Growth Index (110 or so of the largest growth companies in the United States) Expense ratio: 0.07 percent Average market cap: $435.7 billion P/E ratio: 40.5 Top five holdings: Apple, Microsoft, Amazon, Alphabet, Facebook Russell’s review: Bigger is better…sometimes. If you have s

Modern Portfolio Theory is to investing what the discovery of gravity was to physics. Almost. What the theory says is that the volatility/risk of a portfolio may differ dramatically from the volatility/risk of the portfolio’s components. In other words, you can have two assets with both high standard deviations and high potential returns, but when