Lesson 2: Strategic ETF Selections

There is no such thing as a perfect fund.

Understanding rankings in context is crucial. ETFs rarely excel in all areas. For example, an ETF might rank well on value but poorly on growth. This can still make it a great tactical choice in the right market conditions. For long-term investors, an "all-weather" approach is recommended. This approach looks for ETFs that perform at least average or better across all factors, ensuring solid and consistent returns while avoiding significant underperformance when one factor falls out of favor.

Market conditions can heavily influence which factors are favored. For instance, in 2023, growth stocks substantially outperformed value stocks. Thus, growth ETFs did better than value ETFs. Recognizing these trends can help in selecting ETFs that align with current market conditions.

Customizing your investment strategy involves deciding where you want to be on the spectrum from value to growth. The ETF Daddy Power Rankings System provides the tools to find the best ETFs based on your preferences, helping you make well-informed investment choices.