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mattnewport comments on Open Thread: April 2010, Part 2 - Less Wrong
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Since I don't generally consider myself better informed than the market, I usually invest in index funds. At the moment, though, I find Thiel's diagnosis of irrational exuberance to be pretty reasonable, and I'd like to shift away from stocks for the moment.
My question: Is there an equivalent to index funds for bond markets— i.e. an investing strategy (open to small investors) which matches market performance rather than trying to beat it (at the risk of black-swan blowups)? Or alternately, is there a better investment strategy that I can put into place now and not worry about?
ETFs offer small investors access to a number of alternative investments to stocks. There are lots of bond/fixed income index ETFs available. You can also use ETFs to diversify out of US stocks (assuming you're a US investor) through international indexes. It is also possible to invest in other asset classes such as commodities and foreign currencies through ETFs but there are a number of caveats and potential hidden costs to many of these so you should do some research before going that route.