Navigating the World of ETF Investing
Introduction to ETF Investing
Recent news about ETF investing has left many wondering what it means for their portfolio. With the Draco AI ETF outperforming the S&P 500 in 2025, it's clear that exchange-traded funds are becoming an increasingly popular choice for investors. As a result, you're probably asking yourself what this means for your investments and how you can get in on the action.
A hedge fund veteran, having worked at Citadel, Millennium and Tiger Management, Delevska specializes in the industrial sector, and her insights can help you make informed decisions about your own portfolio. For instance, the Noble Absolute Return ETF (NOPE), an exchange traded fund launched by hedge fund veteran George Noble, provides access to a diversified portfolio of assets.
Who Should Read This
Live Market Data
If you're an investor looking to diversify your holdings and reduce costs, then this article is for you. Whether you're a seasoned trader or just starting out, understanding the principles of ETF investing can help you make more informed decisions about your investments. You'll learn how to apply the strategies used by hedge fund veterans to your own portfolio.
With the help of ETFs like VETZ, which invests in government-backed mortgage-backed securities and small business loans to U.S. service members, you can create a diversified portfolio that meets your investment goals. By following the strategies outlined in this article, you'll be able to make more informed decisions about your investments and achieve your financial objectives.
The Core Concept
The core concept of ETF investing is to provide a diversified portfolio of assets at a lower cost than traditional mutual funds. By investing in a broad range of assets, you can reduce your risk and increase your potential for long-term returns. For example, the SPY ETF, which tracks the S&P 500, provides exposure to a broad range of stocks, including Apple (AAPL) and Microsoft.
Meanwhile, the QQQ ETF, which tracks the Nasdaq-100, provides exposure to a range of technology stocks, including Amazon and Google. By investing in these ETFs, you can gain exposure to a broad range of assets and reduce your risk.
What Most People Get Wrong
One of the most common mistakes people make when it comes to ETF investing is failing to understand the fees associated with these investments. While ETFs are generally less expensive than traditional mutual funds, they can still come with significant fees. For instance, the average expense ratio for an ETF is around 0.50%, which can eat into your returns over time.
Another mistake people make is failing to diversify their portfolio. By investing in a single ETF or a narrow range of assets, you're putting all your eggs in one basket. This can be a recipe for disaster if the market turns against you. For example, if you invest all your money in the tech sector, you could be wiped out if the sector experiences a downturn.
How It Actually Works
So, how do ETFs actually work? Essentially, an ETF is a fund that tracks a particular index or sector. When you invest in an ETF, you're buying a small piece of the entire fund, which is made up of a range of assets. For example, if you invest in the SPY ETF, you're buying a small piece of the S&P 500 index, which includes 500 of the largest publicly traded companies in the US.
To illustrate this, let's consider an example. Suppose you invest $10,000 in the QQQ ETF, which has an expense ratio of 0.50%. Over the course of a year, the QQQ ETF returns 10%, but you'll only see a return of 9.5% due to the expense ratio. This may not seem like a lot, but over time, these fees can add up and eat into your returns.
Real-World Application
So, how can you apply the principles of ETF investing to your own portfolio? One strategy is to use ETFs to diversify your holdings and reduce your risk. For example, you could invest in a range of ETFs that track different sectors, such as technology, healthcare, and finance. By doing so, you can reduce your exposure to any one particular sector and increase your potential for long-term returns.
For instance, you could invest $5,000 in the SPY ETF, $3,000 in the QQQ ETF, and $2,000 in the VETZ ETF. This would give you a diversified portfolio with exposure to a range of assets, including stocks, bonds, and real estate. By diversifying your portfolio in this way, you can reduce your risk and increase your potential for long-term returns.
The Strategy
So, what's the best strategy for ETF investing? One approach is to use a core-satellite approach, where you invest a core portion of your portfolio in a broad-based ETF, such as the SPY or QQQ, and then use satellite ETFs to add exposure to specific sectors or assets. For example, you could invest 60% of your portfolio in the SPY ETF and then use satellite ETFs to add exposure to technology or healthcare.
Another strategy is to use a tactical approach, where you adjust your portfolio in response to changing market conditions. For example, if the market is experiencing a downturn, you could shift your portfolio to more defensive assets, such as bonds or real estate. By being tactical in your approach, you can reduce your risk and increase your potential for long-term returns.
Your Next Step
So, what's your next step? One specific action you can take today is to set an alert at $585 for the SPY ETF, which provides key support for the market. If the SPY ETF breaks below this level, it could be a sign of a broader market downturn, and you may want to adjust your portfolio accordingly. Additionally, consider allocating 20% of your portfolio to the QQQ ETF, which provides exposure to a range of technology stocks.
By taking these steps, you can start to build a diversified portfolio that meets your investment goals and reduces your risk. Remember to always keep a close eye on your portfolio and be prepared to adjust your strategy as market conditions change. With the right approach and a little bit of patience, you can achieve your financial objectives and secure your financial future.
Last updated: March 2026
By the Investing Strategies Editorial Team
This content is for informational purposes only. Not financial advice—always do your own analysis before making investment decisions.