Merry Christmas to all of you! 🎄🎄🎄
Of course, there is no market update today but I believe that you should definitely put investing more in your New Year's resolution. If you are a beginner, then today's video is for you.
Beginner's Portfolio for 2020 🎄
Who's a beginner in the stock market? Someone with a fancy finance degree who has never invested in their life is a beginner, so is someone with less than a year experience investing. Today, we will look at a portfolio for a beginner defensive investor. With this portfolio, you only need to look at it once a year or maybe once a month. A defensive investor should not be looking at their portfolio every day or every week.
The portfolio we are going to build is a dynamic All-Weather portfolio. Ray Dalio has his All-Weather portfolio, which is a portfolio which is supposed to do as good as the market without all the volatility. Some people say that you should just invest in the S&P 500 $SPX500 but this is wrong as the markets crashed by 50% in 2008 and if you were retiring that year, it would have been very bad for your retirement fund. That's why you need an All-Weather portfolio and we will make ours dynamic so that you readjust it every year(or month).
What is in this portfolio?
1. 30% should be in the S&P 500 and I suggest the SPY ETF $SPY . You will have exposure to all the big American companies such as Apple $AAPL , Microsoft $MSFT , Google $GOOG , ExxonMobil $XOM .
2. 20% should be in an ETF following the Russell 2000 and I chose the IWM ETF $IWM . These are smaller companies and smaller companies usually grow faster than bigger ones but this index has more volatility.
3. 20% in an emerging markets ETF , for example, the EEM ETF $EEM which will give you exposure to Chinese, Indian, South Korean stocks such as China Mobile $CHL , Alibaba $BABA .
4. 20% in the TLT ETF $TLT which gives you exposure to long-term government bonds. The bonds are going to hedge against any stock market volatility.
5. 10% in gold $GOLD , more precisely in the GLD ETF $GLD .
I'm also doing an experiment on my research partnership ( https://ishfaaqpeerally.teachable.com ) where, I invest every month $150 to the dynamic All-Weather Portfolio for beginners. In May 2019, the $SPX500 entered a correction. It was an opportunity to take to invest more in stocks instead of gold or bonds. That's why I believe that the All-Weather portfolio should be dynamic so that you can take advantage of short-term market volatilities.
Of course, you don't have to readjust your portfolio every month and you can do so every year.
Watch the full video on YouTube and don't forget to subscribe:
Here's the link to my research partnership where you can follow the All-Weather dynamic portfolio and have access to all my research:
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