I am new to investing and am likely to be wrong, but please don't hate me and point to the right direction - I would love to learn. I am a fun of research based conclusions.
I think that over such long period of time of 50 years any volatility and risks will not be the determining factor. So I would think that the best expected return would be from maximizing undiversifiable risks to gain those risk premiums. Therefore I would suggest:
- 100% equity in ETF
- Maximizing small-cap, value, and other factors that are likely to have higher expected return.
- Investing in emerging markets such as China and India since they are perceived riskier and therefore should have a risk premium.
Therefore, my question would become "Which ETF has highest expected return over long-term"?
Following the above reasoning I would pick some or all of the following ETFs:
- VFMF - Vanguard U.S. Multifactor ETF
- VWO - Vanguard FTSE Emerging Markets ETF
- GSSC - Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF
- GEM - Goldman Sachs ActiveBeta Emerging Markets Equity ETF