Money by Tracy O on flickr

Despite being a finance schmuck myself, I don’t like to take big risks when it comes to my money.  And if some clown thinks that just because I’m female and look barely old enough to drink, he can sell me some highly leveraged emerging-markets fund that focuses on outer Mongolia (because you know, yak hair is the next big thing), then I might just try selling him some snake oil– everyone knows it makes toupees look like real hair, wink wink.

Um, skeptic much?  I think that describes me.  Of course, context does matter… if it was Warren Buffett giving the above pitch, you can bet I’d be all over that opportunity (after doing all the necessary diligence, of course).  Then again, the big W doesn’t pitch people, people pitch him.

Anyways, after working at my VERY FIRST full-time job for a little over a year, and having a 401(k) and my Roth and a little extra money to play with, I feel like an adult.  And since the markets are freaking volatile, but generally not good right now, if you’ve got a few decades more for the markets to recover, WTF are you doing not buying?

So that was my rationale for picking out a few more things to plunk down my hard-earned cash for.

Let me say that since I don’t have obscene amounts of money, I am pretty cautious about what I do with it, in terms of following trends (in that I try not to at all). That said, I have a pretty high risk tolerance– since I’m younger and have years until retirement, I go for a higher proportion of stocks and more volatile products, as opposed to bonds.

BIG disclaimer:  I am not writing this post to advise anybody about their finances– PLEASE, like a model RTW, go do your research and take anything anyone says with a boulder of salt, and then make your own decision as to what’s appropriate for your situation.

Here’s what I’m looking at:  ETFs, or exchange-traded funds. Basically, these are index funds that can be bought and sold like stocks, meaning you get broad exposure without having to pick and choose and rebalance constantly.  ETFs come in a variety of flavors, generally arranged by market cap (large, mid, small), asset class (stocks, bonds), location (domestic, international),  and sector (financial, healthcare, industrials, etc).

One of the main things I look at in any fund (ETF, mutual, or otherwise) is the expense ratio.  This little number tells you how much the finance professionals are skimming off the top in order to make hand-waving predictions from their Aeron chairs– but they don’t care if they’re right or wrong, since your fee pays them either way.  Simple math: Minimize their cut, and your profits go up.  Or at least, you won’t be losing as much.

Check out Vanguard and iShares for a smorgasbord of ETFs to fit your personal investing style.  Frankly, if you trade in and out and have to worry about capital gains and taxes, this is likely not for you.  If you want to rebalance periodically and have a longer timeframe for holding, ETFs should work great.

BTW, no rush on this– the downturn is expected to last through 2010…  optimistically.  So take your time.

I’ll blog about my general & very simple investment strategy in another post– hell, I ripped it off an article from Money magazine.  And honestly, I think it’s great for people who don’t want to stress about their finances every day but do want to understand investing for the long term.

What’s your investing strategy in these turbulent times?