Is your investment portfolio stuck in a rut? Do you feel like you need to take advantage of potential returns? Many investors need help to build momentum and see significant growth. The good news is that you can energize your portfolio with the proper techniques. This post will explore five innovative ETF investing strategies to add thousands to your bottom line. Ready to turbocharge your investments? Let's dive in.

Feeling Burnt Out with Your Investments?

Investing should excite you, not stress you out. But if you're like many investors, you may resonate with some of these sentiments:

●      "I don't have enough money to buy more than a couple of shares of popular stocks."

●      "The fees from my actively managed mutual funds are eating into returns."

●      "My portfolio seems stagnant no matter what I try."

●      "I don't have the time or expertise to pick winning stocks."

If this sounds familiar, you're not alone. Many investors get stuck in stagnant portfolios that fail to capture the full potential of capital markets. The good news? With the strategic use of ETFs, it doesn't have to be this way. You can build diversity, reduce costs, and pursue innovative strategies that could unlock thousands in returns. Keep reading as we explore five techniques to inject new life into your investments.

Unlocking the Power of ETFs: 5 Techniques

Before we dig into the techniques, let's briefly highlight why ETFs should be core to your portfolio construction.

●      Diversify Broadly with Minimal Money: Unlike individual stocks, which require hundreds per share, ETFs let you gain exposure to entire markets for just the cost of a share. This makes diversification easy and affordable.

●      Cut Costs That Eat Returns: Actively managed mutual funds often charge 1% or more in annual fees. ETFs enable you to keep more of your returns with cheaper expense ratios.

●      Trade Simplicity: You can buy and sell ETFs on public exchanges like stocks—there is no waiting on fund managers or extra paperwork.

●      Innovate Your Strategy: From sector funds to thematic to active management, ETFs offer unique exposure opportunities.

The versatility of ETFs frees you to build the portfolio you want. Now, let's uncover five techniques to unlock their potential.

Stack Core Asset Classes for Solid Bedrock

Every portfolio starts with a firm foundation. For broad equity and fixed-income exposure, ETFs tracking standard indexes are ideal. Consider funds like VTI and BND that track the CRSP U.S. Total Market and Bloomberg U.S. Aggregate Bond indexes. Holding both provides you with a slice of thousands of U.S. stocks and bonds. Layering in international equity and bond funds also helps round out your core. For simplicity, target funds track FTSE's All-World ex-U.S. Index for international stocks and Barclay's Global Aggregate ex-U.S. for bonds. Building on this base allows you to overweight specific sectors or assets while maintaining balance.

Tilt a Small Cap for Outperformance

Want to amplify returns? Research shows that over long periods, small-cap stocks out earn large caps. This performance advantage is known as the size premium. However, many core U.S. equity funds skew heavily toward large-cap holdings. Tilting your portfolio to dedicate 20-25% specifically to small-cap stocks could help you capture excess returns over time. Look at the iShares Core S&P Small-Cap ETF with ticker IJR for cost-effective exposure.

Target Dividend Growers

Rising dividend payouts are clear evidence of healthy, growing companies. Investing in ETFs focused specifically on dividend growers and payers can fortify your portfolio. For example, the Pros hares S&P 500 Dividend Aristocrats ETF (NOBL) tracks an index of S&P 500 members with 25+ years of raising dividends. Impressive history! Dividend investing may also benefit from the favorable tax treatment of qualified dividends. Take advantage where suitable.

Embrace Equal Weighting

Market cap-weighted indexes like the S&P 500 allot companies by size—the largest firms take the biggest slice of the index pie. By contrast, equal-weight indexes give every holding the same starting allocation. This means lesser-known small and mid-caps represent a more significant share of assets than market weighting. Research shows that equal-weight structures tend to outperform over long holding periods. See the Invesco S&P 500 Equal Weight ETF (RSP) for domestic exposure. Over the past ten years, it has beat the market-cap-weighted S&P 500.

Get Active in Bond Markets

When constructing your fixed income allocation, passive index funds work fine for getting cheap, diversified exposure. However, the strategic use of active management could enhance returns. Actively managed bond ETFs allow experienced managers to over- and underweight sectors based on opportunity. This means shifting exposures to areas of the market perceived as undervalued. For example, check out the actively managed Guggenheim Total Return Bond ETF (GTO), which outperformed its benchmark Bloomberg US Aggregate Bond Index over trailing 1-, 3-, and 5-year periods.

Energize Your Portfolio Today

If your investments have lost momentum, it may be time for an energizing makeover. As we explored above, the strategic application of ETFs offers exciting potential to cut costs, diversify broadly, and pursue innovative techniques that could finally kickstart stale returns. What ETF investing ideas resonated most with you? Did any strategies particularly excite you? Try these techniques and see where they may lead your portfolio next. The journey starts today. I wish you prosperity ahead!