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Category: Investing

A Return to Building a Simplified Portfolio

Out of every adjective that you can associate with a portfolio, our favorite is this: simple. Indeed, a lot of people avoid getting involved in investing because they think that it’s always supposed to be difficult and complicated. The truth is that you really can build a great portfolio that manages your risks while still opening you to profits. It’s just a matter of following a more straightforward plan no matter if you are investing in forex, stocks or something completely different.

Now, keep in mind that if you’re looking for the quickest solution, there’s always a cost that you will have to pay. This isn’t in terms of pure money per se, but more in terms of effectiveness. You see, you can build a portfolio quickly, but will your portfolio be as profit-producing as someone that really sat down and picked every last stock and bond? No. That’s the honest truth. You will have a nice portfolio that can get you moderate returns, but the only way to get those razor-sharp returns that you hear about is to actually do the research yourself — stock charts, fundamental analysis, historical figures…you get the idea. Some of us are pretty busy, and we just can’t find the time to do those things.

That’s where things like ETFs come in. If you haven’t heard the good word about ETFs, then you’re definitely in for a treat. ETF stands for exchange-traded funds, and they’re one of the big ways that people can get access to the investing world without spending a bunch of money.

It’s a matter of percentages, at least when it come sot your investment portfolio. In order to be “diversified”, you want to have some of your eggs in one basket a percentage of the time, and some of your eggs in another backset — again, for a percentage of time. This is usually simplified into a ratio of 60% stocks and 40% bonds. Stocks are more volatile, but they also give better returns. Continue reading A Return to Building a Simplified Portfolio

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