Building a Portfolio from Scratch? Consider ETFs
Exchange Traded Funds (ETFs) have truly revolutionized the concept of diversification, and they have fundamentally changed the way people invest. Investors can now seek-out different markets, sectors, regions, and/or asset classes that interest you.
ETFs for investing are like apps for your phone. Do you want to invest in only green energy companies? There’s an ETF for that. Are you looking for an ETF that invests in only Israeli stocks? There’s an ETF for that. Do you want an ETF that targets global real estate? There’s an ETF for that too.
The categories and ETF options are so expansive that there are currently more than 1,700 available to choose from, and the number keeps rising. The ETFs can be narrowly focused on a particular region, commodity, style, or can be expansive like investing in an entire market, like the S&P 500. In fact, for many investors, simply buying an S&P 500 ETF (ticker: SPY) and calling it a day is all they’ll ever need.
ETFs can give new investors a benefit because they are generally cost effective (low annual fee) and represent a category, which means investors can obtain instant diversification (assuming you invest in a broad market or multiple categories).
That being said, for new investors or those building a portfolio from scratch, choosing from the extensive menu of ETFs can be somewhat daunting. A good place to start is by answering some questions that inform who you are as an investor:
- What are your investment objectives?
- How do you feel about risk?
- How long will you be investing for?
- Do you have any particular interests when it comes to investing? I.e., are there certain opportunities or regions or asset classes you’re interested in?
- How much do you plan on investing?
Those questions are all good primers for narrowing your options and figuring out which ETF(s) could make sense for your situation.
Next would be to search and filter the ETFs. Using the iShares website is helpful to poke around on all the options, and Vanguard and Schwab also offer good selections of ETFs. TD Ameritrade also has a tool that allows you to search for and filter ETFs by different criteria, like performance, sector, fund family, market cap, ratings, portfolio holdings, and so on. They also have more than 300 ETFs that you can trade commission-free.
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SPY's Indicator enters downward trend
The Aroon Indicator for SPY entered a downward trend on January 08, 2025. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 110 similar instances where the Aroon Indicator formed such a pattern. In of the 110 cases the stock moved lower. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on January 07, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on SPY as a result. In of 69 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
SPY moved below its 50-day moving average on January 07, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for SPY crossed bearishly below the 50-day moving average on January 08, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 12 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 42 cases where SPY's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in of 366 cases, the price rose further within the following month. The odds of a continued upward trend are .
SPY may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
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Category LargeBlend