Most investors such as retirees looking for current income are having a hard time finding suitable ways to invest. The 10-year Treasury note yielded 15 percent in 1982 and that dwindled down to two percent at the end of 2012. So, where can you find good investment these days? Many suggest using exchange-traded funds (ETFs). They are a low-cost way to build a portfolio with stocks and bonds. It provides diversification, liquidity and generally a cheaper way to invest than mutual funds.

Today, an income investor can find a reasonable ETF with a 0.4 percent expense ratio. Also, in order to diversify one’s investment to reduce risk, a basket of ETFs can be chosen from an enormous pool available. Behemoths like iShares, PowerShares, SPDR, PIMCO, Vanguard, Charles Schwab and many others offer a wide selection of bond ETFs for income investors. They may not be suitable for young, say under the age of 50, because their time horizons are much longer and other opportunities provide better investment vehicles. With an ETF, traditional laddering that is needed with bonds doesn’t come into play. At a time bonds, Treasuries and other traditional investment vehicles for income provides less than desired returns, ETFs can provide much needed income while protecting the nest egg.