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The ETF Book: All You Need to Know About Exchange-Traded Funds, Updated Edition by Richard A. Ferri

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CHAPTER 16

Portfolio Management Strategies

All of the chapters in Part IV are provided to help you select and manage your exchange-traded fund (ETF) portfolio. Four basic methods of portfolio management are introduced so you can compare and contrast strategies.

The information in this section is intended as a starting point for research and analysis. More study is recommended before you make a final decision on which strategy is best for you. Appendix B provides an excellent point to begin your search for more information.

The four investment strategies reviewed in this section cover passive investing, life cycle investing, active management, and special uses. Selected ETF portfolios for each strategy are provided. The ETFs selected are examples, not endorsements. There are many fine ETFs not included in this book because there is not enough space, and the marketplace is evolving quickly. Each investor should investigate several competing funds before ultimately deciding on the ones that are appropriate for his or her unique situation.

Of course, there is always the option of hiring a professional investment adviser to assist in ETF selection and the management of your portfolio. An educated investment professional should be able to explain the differences between ETF types and styles, including the advantages and disadvantages of the indexes they follow.

Passive Investing

Chapter 17 explains the elegantly but effective passive investment strategy of buy-and-hold investing. It ...

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