Simple and Sustainable Asset Allocation solution in just 5x6min videos!

Introduction:

After I have created my blog and started writing about investment, I, also, started investigated what else is available on the internet. Pages like Investopedia, which is a great source. Also, I come about the same name book as my blog, with some great short videos from the author. Therefore, I have decided to share these with you.

Have fun watching. This will help you better understand subjects we will review in the future blogs. Also, keep your mind open there isn’t just one investment strategy.

Discussion:

Authors view is that you cannot outperform the market. And you should invest in safe bonds and global equity index.

Although it is mostly true, especially in beginning, you need to consider your personal situation and returns required. Please, refer to my previous blogs about allocation, IPS and keep in mind that you can play with 75%/25%. The portion investing in equity can be index fund when diversification needed. But when sufficient is achieved, you can invest in few promising stocks ensuring that adequate return is achieved for future goals. Of course, remember that any one asset should be less than 5% of total portfolio. Investment Chronicle and Stockopedia will definitely help to decide on good stocks to pick. Btw, the strategy described in the paragraph is called core-satellite portfolio/investing and will cover extensively in the future.

Factors that affect your decision to invest mostly into broad market index:

A short time horizon for portfolio objectives:

  • Index investment is a passive strategy, you invest some amount of money and leave them there to growth together with the market for a long time >10 years. Thus, this strategy is not to make quick money, but to have slow, safe and sustainable growth. If you time horizon is short <5 years, this may not be a suitable investment strategy. If you over trade, you cost will eat in your return.

Please, I will have one with low risk:

  • If you do not like risk index ETF as the right way for you. It usually has low volatility and tracks market movement. So you are not exposed to a single asset.

You do not care that you will miss out on some small company massive growth:

  • If you understand that small companies have a much higher risk and will be ok, that you missed on some growth opportunity in exchange for safe growth.

High short-term income and liquidity needs:

  • If you have high short-term liquidity needs investing in liquid ETF market, will ensure that you can sell your asset relatively quickly and get your liquidity. Investing short term may give some positive return, but these have to be higher than trading costs.

You do not trust asset managers, who offer amazing return with low risk:

  • If you do not like someone to manage your portfolio for a fee but still want a simple solution to invest then index ETF will provide you with this option.

You can buy the author’s book here:

Finally videos:

Part 1

Part 2

Part 3

Part 4

Part 5

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