SPDR S&P 500 ETF
What better way to take single-stock risk off your plate without exiting the market than … well, buying the market? The SPDR S&P 500 ETF (NYSE:SPY), which tracks all 500 of the index’s components, is highly diversified across all the major sectors, and boasts a crazy-low expense ratio of less than a tenth of a percent! So, you get access to a score of blue-chips like General Electric (NYSE:GE) and Johnson & Johnson (NYSE:JNJ) without having to worry about the fallout from a single stock hitting the skids.
Best of all, exposure to this broad-based index also means exposure to a number of dividend stocks, resulting in a yield of roughly 2% — nothing to scream about, but it’s better than the 10-year T-Note right now.
However, you should note that the fund is weighted by market cap, which means stocks like $400 billion Exxon Mobil (NYSE:XOM) have more effect on the fund than, say, $2 billion First Solar (NASDAQ:FSLR). But again, the weight is spread across 500 stocks, so even a huge dip in XOM wouldn’t shatter the SPY.