choosing ETFs

[Gil Faver]

I have not yet found a tool to help you pick one or more ETFs based on your
outlook. I have found "screeners", which it seems to me require you to
understand your outlook and how that translates into market choices, and
then the screener will help you screen ETFs based on those market choices.
But, is there a tool to help you jump from your outlook to one or more ETFs?

For example, E-trade asks you a series of questions, such as how soon might
you want to use this money, how risk tolerant are you, etc. It then puts up
pie charts, like x% bonds; y% big caps, etc. Then you toss all this away,
and go to their ETF screener, and plug in different info to sort through the
ETFs.

Is there a tool that takes E-trades step one, shows you pie charts, and then
points you to ETFs that fit the bill?

Also, is there a tool that includes questions such as how likely do you
think the recession will last x months, how do you think inflation will be
in 1 year, etc? It could even give you clues as to what some brains are
predicting, then let you punch in your biases.

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[Augustine]

FWIW, I just use a dart board: I list all the ETFs, pick a random
number and zoom into the chosen ETF. Then I list other similar ETFs
and look at trade volume and costs, choosing one that's easy to trade
with low operating costs.

I started doing it a few years ago when the WSJ journal would compare
a random portfolio with the readers' and the former beat the latter
often, though not always. As I myself am a poor stock picker, the
dart board has worked much better for me than when I tried to research
to pick a stock.

HTH

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[beliavsky]

FWIW, I just use a dart board: I list all the ETFs, pick a random
number and zoom into the chosen ETF. Then I list other similar ETFs
and look at trade volume and costs, choosing one that's easy to trade
with low operating costs.

Suppose you throw three darts, and they all fall on equity ETFs. Does
that mean you put all your money in stocks?
And if one dart falls on an equity ETF and the other two fall on bond
ETFs, you are only 33% in stocks? I hope you don't really manage your
saving in this manner.

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[Augustine]

Suppose you throw three darts, and they all fall on equity ETFs. Does
that mean you put all your money in stocks?
And if one dart falls on an equity ETF and the other two fall on bond
ETFs, you are only 33% in stocks? I hope you don't really manage your
saving in this manner.

That's a good point and I should have been more specific.

When I amass about 100x more than the buy and sell brokerage
commissions in savings (or about $2000), it's time to invest. Then I
throw one "dart". Given that the majority of ETFs are equity-based
and my age, it's OK for me. I do this for both Roth IRA and regular
savings, not counting plain money-market savings as the emergency
fund.

In my 401k, I just invest in the age-based fund.

In both cases, the average return even after this slump is over 15%
per year for the past 5 years or so. I reckon I beat most
professionally-managed funds.

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