{"id":7249,"date":"2013-12-13T12:38:46","date_gmt":"2013-12-13T20:38:46","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7249"},"modified":"2016-12-21T07:28:16","modified_gmt":"2016-12-21T15:28:16","slug":"etf-funds-late-starters","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/etf-funds-late-starters\/","title":{"rendered":"ETF Funds For Late Starters"},"content":{"rendered":"

One of the more unnerving facts about\u00a0retirement investing<\/a>\u00a0is the illusion of knowledge. As we get older and more wise to the world, the tendency is to believe that we understand how things work.<\/p>\n

Relationships, at least the relationships of others, have more obvious outcomes. The motivations of those around us become easier to predict. Often, we are in the prime of our career lives, a time of fewer mysteries and more opportunities to make an impact.<\/p>\n

\"etf<\/a><\/p>\n

Then we turn on CNBC and apply our semi-expert brains to the wider world of investing. The motivations of millionaire CEOs seem clear to us, somehow. The next moves of governments and traders feel logical, almost common-sense predictable.<\/p>\n

And the entire thing is an illusion, through and through.<\/p>\n

The fact is, we do not have personal crystal balls. More often than not, our best guesses as to the direction of a given stock or the market itself are guesses. When we are right, it feels like vindication. When we are wrong,\u00a0the market must be irrational<\/a>.<\/p>\n

Late starters to investing can avoid this trap by using index funds, particularly\u00a0index\u00a0ETFs<\/a>, to own whole sectors of the market. When you index, the crystal ball problem shrinks into the background. Owning several thousands stocks in an ETF greatly reduces your need to be “right” in any given case.<\/p>\n

Here are some funds to consider for late-starting retirement investors:<\/p>\n

Vanguard\u00a0Total\u00a0Bond Market ETF (BND)<\/strong>
\nThis broad-market bond fund tracks a market-weighted index, owning 80% of its assets in\u00a0bonds\u00a0held in the index. The fund maintains a dollar-weighted average maturity consistent with that of the index, ranging between five and 10 years.<\/p>\n

Bonds\u00a0have gotten a lot of bad press, but a late-starting investor likely cannot put every penny into stocks. BND offers a chance to hold some bonds while not taking\u00a0individual bond risk<\/a>.<\/p>\n

iShares Russell 3000 Index (IWV)<\/strong>
\nThe Russell indexes follow thousands of stocks, and this ETF version holds least 90% of assets in the securities of the underlying index. It uses a replication strategy in order to track the Russell 3000 index, which measures the performance of the broad\u00a0U.S. equity market<\/a>.<\/p>\n

By owning a broad exposure to U.S. companies you get both the predictability of U.S. management and accounting plus whatever upside those companies get from their foreign income.<\/p>\n

Vanguard Emerging\u00a0Markets\u00a0Stock ETF (VWO)<\/strong>
\nForeign stocks tend to be more volatile but, over time, the better investment for those can stomach the risk. VWO tracks the performance of the\u00a0MSCI\u00a0Emerging\u00a0Markets\u00a0Index, approximately 840 common stocks of companies located in emerging markets around the world. Foreign stocks are not the center of a late starter’s portfolio, but they have a role to play.<\/p>\n

The really important part is to own these types of investments in a\u00a0balanced portfolio<\/a>\u00a0designed to bring you the upside of measured risk while not assuming the kind of volatility than can sink the ship.<\/p>\n

Most importantly, owning funds relieves the late starter of the knowledge illusion and allows you instead to concentrate instead on the parts of your life where expertise does play a role, such as your career and personal life.<\/p>\n","protected":false},"excerpt":{"rendered":"

One of the more unnerving facts about\u00a0retirement investing\u00a0is the illusion of knowledge. As we get older and more wise to the world, the tendency is to believe that we understand … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7250,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[7],"tags":[],"yoast_head":"\nETF Funds For Late Starters | MarketRiders<\/title>\n<meta name=\"description\" content=\"Here are some ETF funds to consider for late-starting retirement investors.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketriders.com\/investing\/etf-funds-late-starters\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"ETF Funds For Late Starters | MarketRiders\" \/>\n<meta name=\"twitter:description\" content=\"Here are some ETF funds to consider for late-starting 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