You might remember the gameshow “Name That Tune.” Contestants work to guess a song based on as few notes as possible. As it turns out, I’ve been doing something akin to that with an increasing chunk of my overall portfolio. And despite my own initial disbelief, the longer the stock market continues to trade like one big risk-on, risk-off investment, the more I believe that for many, two exchange-traded funds (ETFs) is all it takes.
Every investor should have a “core” and “anchor” that keeps them stable and allows them to explore with their true “risk capital.” The problem is that the S&P 500 Index ($SPX) has been considered that core. And it is acting very chaotically, with clearer signs each week that it is not going to bounce back as easily this time.
