When I first started working, I was a fairly involved investor. I read books on how to invest, research the stocks, and invested in equities. As time went on, I find that with limited free time and so many other things I'd like to do, I have less and less time to actively manage my own portfolio. Also, as a hobby investor, it's hard to achieve good returns. I switched to a more passive and laid back investment strategy: indexing based on Exchange Traded Funds(ETFs).
I did my research and looked at my risk tolerance to decided what sectors & the ratios of my portfolio I want to invest in each sector. Then I picked the ETF I wanted to use to index each sector. Then once a year, I re-balance to ensure the ratios are back to originally decided. In my portfolio I have ETFs that index the US market, Canadian Market, Emerging Markets, International Markets, and Bonds. I still reserved about 5% of my portfolio to purchase one or two stocks for fun. This has served me well since I can pay more attention to the stocks I purchased.
So that's my investment strategy Part 1. For me another type of diversification, in addition to diversifying in the market is to diversify the type of invest.
Coming up:
My investment strategy Part 3 - Real Estate
My investment strategy Part 2 - Private Equity
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