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If I’m mostly in a big ETF, how can I also protect myself from these companies?
by jtbayly 5y ago
If I’m mostly in a big ETF, how can I also protect myself from these companies?
- acjohnson55 5y agoHypothetically, you could short overvalued companies. But you might be better off finding a value-oriented ETF that simply excludes high-multiple growth stocks. Blue chips and dividend stocks, perhaps. But this is very simplified advice. You may want to buy a couple hours of a fiduciary advisor's time if you want to seriously pursue that strategy. Most folks will simply ride the top x-hundred companies, let their returns get padded in the good times and take the drag in the bad times as growth stocks rise and fall. Over decades, this strategy backtests pretty well.
- anonporridge 5y agoUse ETFs with strict rules of entry designed to keep out the imposters. I believe the S&P 500 index actually broke their own rules by not adding TSLA in the quarter it should have been added. I imagine the people in charge of the index were incredulous about it's insane value rise and questionable profitability. Then again, the risk you take by using an index that excludes these kinds of companies, is that you miss out on the next AMZN until it's fully valued. Just VTI and chill.
- xqcgrek2 5y agoAVUV or VIOV