Like mutual funds, ETFs allow investors to spread risk over a series of investments, as opposed to one or two stocks or bonds. This lessens exposure to loss and provides peace of mind for investors who are weary of dramatic swings in the market.
"Most people confuse investing with gambling. Gamblers try to “beat the house.” Investors want to be “the house."
— The Smarter Mutual Fund Investor: Are You Gambling or Investing?
Selling stocks in a falling market in favor of Treasurys, however, is a lot like leaving a building during an earthquake. You may feel safer, but you’ve likely put your finances in grave danger by liquidating stock positions at a time when equities are relatively cheap, and purchasing Treasurys that are relatively expensive. When it comes to buying just about anything other than stocks, we look for bargains. But when stocks go on sale, we head for the exit.
"The fear attribute of gold is off the table. Gold was becoming all things to all investors and it got overdone. And I saw rampant speculation."
— Douglas Coté, senior market strategist at ING Investment Management — What’s Next for Gold?
