Turn Down the Volatility on Your Investments


Looking for an antidote to the queasy feeling you have about the markets?

Low-volatility exchange-traded funds (ETFs) could be the tonic you’re looking for.

In general, ETFs offer investors a cheaper and (in some ways) easier means of getting into the market. But most ETFs passively track an index, i.e. a certain market sector, which means you’re exposed to those highs and lows.

With a low volatility ETF, you invest in more stable sectors, such as healthcare, utilities, and consumer staples. This way, you can scale back your exposure to risk, while still maintaining a position in equities and reaping some gains.

Plus, ETFs in general are inexpensive—an important factor for women, who need to maximize returns by keeping their investing fees low.

“Low-volatility ETFs have slightly higher fees than regular ETFs, but they are still cheaper than mutual funds,” says Tom Lydon, president of Global Trends Investments and editor of ETFtrends.com.

But remember that safety has its downside: yes, you’re protected from stomach-churning market dips, but you’ll also miss that soaring bull market rally. Any day now.

Surf’s Up. How do you minimize risk in your 401k or portfolio?