Instructions

Choose an asset mix for your portfolio. Financial institutions often recommend model portfolio allocations based on investor demographics, risk tolerance and other factors. You may also use an online asset-allocation tool to determine the right mix of stocks and bonds for your portfolio. Equities are riskier than bonds, which are riskier than cash.

Buy ETFs for the bond component of your portfolio. You can subdivide bonds by issuer, maturity, yield or a combination of factors. Bond ETFs track government bonds, corporate bonds and bonds of different maturities. The value of a bond ETF fluctuates with the price of the underlying securities, and the ETFs make monthly or quarterly distributions. The yields on government bonds are generally lower than corporate bonds because the risk is lower.

References

Resources

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