Everything In Moderation: How To Do It In One Trade

Stocks, bonds and ETFs can be intimidating and overwhelming to a new investor. Sometimes it’s hard to even know where to start when it comes to investing for your future. The stock market goes up and down seemingly at random somehow, with some stocks flying high and other crashing left and right. As the world witnessed back in 2008, sometimes the entire stock market even crashes, and almost any stock you choose can lose value.

Make An Easy, Long-Term Investment

As much as some people would like to believe that certain investments are “sure things,” the truth is that nobody really knows where the market is headed at any given time. One of the best ways to protect your investment is to try to reduce your risk by investing in a wide range of different stocks and bonds. This diversification limits the potential damage that any single stock or bond could do to your returns if the investment turns sour.

If you’re looking for a way to invest in a balanced and diversified group of stocks and bonds, Stash’s “Moderate Mix” ETF, more commonly known as the iShares S&P Moderate Allocation Fund ETF AOM, might be worth a look. The ETF is nicknamed “Moderate Mix” because it contains shares of 10 stock and bond ETFs with a wide range of themes.

Which Investments Are Included?

Most of the investments in “Moderate Mix” are stock and bond ETFs that generate relatively stable returns over time. A bond is one of the safer types of investments when issued by a trustworthy company or government.

One type of “Moderate Mix” investment is corporate bond ETFs, such as iShares Trust IUSB and iShares Lehman Credit Bond Fund (ETF) CRED.

In addition to corporate bonds, “Moderate Mix” also includes government bond ETFs such as iShares Trust GOVT.

Finally, “Moderate Mix” includes diversified stock ETFs, such as iShares S&P 500 Index (ETF) IVV for the largest American companies and iShares Trust IEUR for top European companies.

Returns

How good of an investment is “Moderate Mix”? According to Morningstar, in the past five years, the fund has slowly and steadily gained more than 10.1 percent for its investors, who have avoided much of the wild swings in the stock market along the way.

In addition, the fund’s expense ratio, the amount of money spent on fees and administrative costs, is only 0.23 percent.

Takeaway

The “Moderate Mix” fund is only one of the “I Like” investments that allows investors to avoid hundreds of dollars in trading fees and invest in a wide range of stocks and bonds they like all at once by buying a single ETF.

Disclosure: the author has no position in the stocks mentioned.