My winning portfolio
Everyone always wants to know the secret to stock investing, and ask for my advice. Typically my advice is simple: Buy consistently enough to find your perfect risk tolerant patterns (discussed in my book).
I know not everyone is a huge fan of the giant (Tony Robbins) but this book, unlike, his others was written by publishing several interviews that he conducted (Go Star Power!). Not to make this sound like a book report (it is not), but when I listened to the audiobook, I could tell he wrote with a great deal of excitement.
So before moving on, this is somewhat a review on a very tiny section of the book, but it is also access to some of the secrets shared in the book (again a small portion). I personally believe you should get a copy, read it, and take notes. However, if you simply want to save time (it is a lengthy book) I would recommend picking up my book and applying the strategies from my book with this portfolio discussed below.
FTC Disclaimer: There is a good potential that the author of this blog post could profit off of your actions from stock purchases, advertising, or book purchases.
I am probably the only author that puts a warning like that in the middle of the post rather than at the end. I am not the only author that would like to point out the craziness of that warning, because isn’t it fairly obvious that I would profit off of the purchase of my book if you bought my book? See also: Tim Ferris’s Disclaimer
What stock should I purchase?
I get this question a lot. I have made a ton of money off of stock, but as far as picking a stock goes that is a tough call. I personally do not like to recommend a stock, because that is risky (you can lose money, then blame me) However amassing a portfolio of diversified investments is really the way to go.
Where should I put my money?
Glad you asked! Personally, I prefer ETFs over mutual funds. The reason is that I have better control and the math is just easier to do (YES! I do not want to make things complicated!). Tony Robbins also recommends this in his book (even though I had the idea years ago!)
The 2 main portfolios suggested in the book mentioned above are here:
20% US Stock
20% International Stock
10% Emerging stock
20% Real Estate
15% US Bonds (Long-Term)
15% 7 to 10-year bonds
40% 20 to 25-year bonds
Out of the 2 which do I prefer? Neither 100% However I am not close to retirement. My biggest qualm with them is the US Bonds. I will be honest, I don’t trust them. Call me crazy, but I am not a fan. Especially the thought of having 40% of my cash in 20 to 25-year bonds. I don’t have that kind of faith. However! The second portfolio is the stronger of the two (calculated since the “birth” of the stock market). This is basically the 80/20 rule. Most would see the small amount of stock and think it hypocritical for me to suggest it, but here is the reason.
80% of your gains will be made by 20% of your investments. So why not invest all 100% into stocks? Because this is your
freaking retirement. I know a lot of people that have lost a crapload on their retirement. At the time of writing this my retirement plan (company 401k) is down 6% this year!!!!! It is the first month of the year! I would also like to point out I am young, and the main reason I do the 401k is that of the employer match, AND I have only been with the company for 3 years.
Let’s look at this differently. What if my retirement date was set in February, and I just lost 6% because I wanted to put 100% of my money in stocks… well rather than living to be 90, I better kick the bucket at 85 because I just lost 6% of all that is left. Another plan would be to keep working (probably the better plan), but what if you didn’t have a choice?
The point: The second portfolio has only lost a couple of years out of 100, and it also gains consistently. This portfolio may not be sexy, but it will at least keep you alive until you are 90.
Thanks for reading,