Archive | 2.33

100% Equities

26 Apr

As you can tell by now, all my investments are in equities.  I have no cushion if my stocks head south.  I am quite vulnerable to the swing of the markets.

What’s a good balance in a total portfolio?  It is called bonds.

Bonds are boring.  They provide a steady stream of income and security.  They don’t really fluctuate much unless interest rates are rising or falling…  But you know what, they can be the savior of your portfolio if the market crashes and burns.

From what I hear, you should allocate a certain percentage of bonds to your age.  For example, I’m 31 years old.  Then I would allocated 31% of my portfolio dedicated to bonds.

Am I going to do this?  I am considering it, but I’m not going out on a limb to follow other’s suggestions.  Keep in mind, I still have a good 30 years to ride the stock market up and down.

If you want to preserve your capital, then bonds are the route to take.  Everyone’s needs are different.  Choose the path that is best suited for yourself.

But never ever buy mutual funds!  Fund manager makes a ton of money thanks only to uninformed investors who take the easy route by handing their money over to their financial advisors.

If you don’t like selecting stocks on your own (Always the best option in my opinion), then INDEX FUNDS or ETFs are the way to go.  They charge less fees and follows the market as a whole depending on which part you want to invest in.