If you've chosen a target asset allocation-the mix of stocks, bonds, and cash in your portfolio- you're probably ahead of many investors. But unless you're investing in a set-and-forget investment option like a target-date fund, your portfolio's asset mix will shift as the market fluctuates. In a bull market you might get more equity exposure than you planned, or the reverse if the market declines. Rebalancing involves selling assets that have appreciated the most and using the proceeds to shore up assets that have lagged.
Exchange-traded funds are the go-to for conservative investors who have a long timeframe. The yield you get today is very generous compared to just five years ago. Yet, it may not be the wisest idea to have your portfolio concentrated entirely in ETFs that yield in the low single digits. Having some higher-yielding ETFs can give you extra income with negligible added risk if you hold them for the long run.