How Do You Invest?
4 comments
I use a pyramid method to investing. At the bottom is a large amount of municipal bonds (either directly or through funds). Maybe 2/3's of my portfolio is in bonds. Next is my pyramid is stock funds, mainly ETFs, distributed across multiple industry and asset classes. Mostly domestic but some international. At the top of the pyramid is individual stocks. I buy stocks of companies I know about. I dont do this actively but from my travels you pick up a hint or two ahead of the market. 2 examples of this; noticing how fast Tesla's China gigafactory came up but the market didnt notice yet, so scooped up Tesla at 250. Another is noticing top 10 CPUs on Amazon were AMD but no bump in their price, so scooped some up at $22 a share.
As I get closer to retirement, and my stock funds increase faster than my bond funds, I rebalance by just buying more bonds when I invest new money.
I'm not a gambler. I want to beat inflation for the bulk of my hard earned money, and have some in the market to take advantage of America's great economy. The other good benefit of bonds is that you can use it as a higher interest savings account, since they are pretty stable.
As I get closer to retirement, and my stock funds increase faster than my bond funds, I rebalance by just buying more bonds when I invest new money.
I'm not a gambler. I want to beat inflation for the bulk of my hard earned money, and have some in the market to take advantage of America's great economy. The other good benefit of bonds is that you can use it as a higher interest savings account, since they are pretty stable.
I've not used a traditional financial advisor.
I did work in investment finance for ~20Y and I am aware that even the top people in the field don't have some secret book of predictions to make certain cash.
Because I worked in finance I basically wasn't allowed to have many bare stocks, so I'm in the habit of using funds.
I do take account of which vehicles my broker thinks are among the best, though they can be very wrong too.
I attempt to have a decent geographic spread, though have most where I think I'll be living/retiring so most likely to have results correlate reasonably with the economic environment that I'm in.
But I'm likely doing it all wrong, of course, and this is most definitely not advice for you from me.
I did work in investment finance for ~20Y and I am aware that even the top people in the field don't have some secret book of predictions to make certain cash.
Because I worked in finance I basically wasn't allowed to have many bare stocks, so I'm in the habit of using funds.
I do take account of which vehicles my broker thinks are among the best, though they can be very wrong too.
I attempt to have a decent geographic spread, though have most where I think I'll be living/retiring so most likely to have results correlate reasonably with the economic environment that I'm in.
But I'm likely doing it all wrong, of course, and this is most definitely not advice for you from me.
"have most where I think I'll be living/retiring so most likely to have results correlate reasonably with the economic environment that I'm in"
This is interesting - why do you take this approach? (If you don't mind sharing)
This is interesting - why do you take this approach? (If you don't mind sharing)
For the reason given: I suspect that if my assets' values were severely dislocated from my local economic environment I'd either be very unhappy and poor, or likely unable to access or use any huge excess (eg might be taxed near to death).
I'm hedged in so far as ~50% is geographically in my area, and the rest well spread.
I also have some spread over asset classes (eg stocks vs bonds).
I'm hedged in so far as ~50% is geographically in my area, and the rest well spread.
I also have some spread over asset classes (eg stocks vs bonds).
So, I'm curious, is this attitude systemic and prevalent among us?
How do you pick your investment vehicles?