ETF Choices
These are the ETFs that I am going to focus on for now.
| Ticker | Family | Name | |
|---|---|---|---|
| 1 | EFA | ishares | MSCI EAFE Index Fund |
| 2 | EWJ | ishares | MSCI Japan Index Fund |
| 3 | GLD | statestreet | SPDR Gold Shares |
| 4 | IEF | ishares | Barclays 7-10 Year Treasury Bond Fund |
| 5 | IWB | ishares | Russell 1000 Index Fund |
| 6 | IWM | ishares | Russell 2000 Index Fund |
| 7 | RWX | statestreet | SPDR Dow Jones International Real Estate ETF |
| 8 | TLT | ishares | Barclays 20+ Year Treasury Bond Fund |
| 9 | VNQ | vanguard | REIT ETF |
| 10 | VWO | vanguard | MSCI Emerging Markets ETF |
| 11 | SLV | ishares | Silver Trust |
The US stocks segment is split into large cap stocks based on the Russell 1000 index (IWB) and small to medium cap stocks based on the Russell 2000 (IWM) index.
Foreign stocks are split into Europe, Asia and Far East (EFA), Japan (EWJ), and emerging markets (VWO).
Bonds are split into mid-term bonds (IEF) and longer term bonds (TLT). Later I will consider whether to use short term bonds (SHY), or a money market account to hold cash.
Real estate is split into US REITs (VNQ) and international REITs (RWX).
Commodities are split into physical gold (GLD) and physical silver (SLV). I'll have more to say later about alternatives, for example exchange traded notes that track a commodities based index, such as DBC.
My Reasoning For Choosing These ETFs
Each of the equity and bond ETFs are based on broad indexes, which provides diversification within that asset type. The exception being GLD and SLV, which concentrate on gold bullion and silver bullion. Each ETF covers a different portion of the economy and hopefully react differently and at different times to changing economic conditions. Therby giving me a second layer of diversification, ie across asset types.
I'll dig deeper into the math of why this is beneficial next time.
Disclaimer
I own EFA, VWO, GLD, SLV, RWX, VNQ, IEF, SHY at this time, and could buy and sell at any time.
Mostly Quantitative 