Investing from Ground Zero
Ready to start investing? Excellent! This is good. If you have done some research you may have an idea of what you want to invest in. Your confidence in your plan may be strong or you might not be sure what you are doing.
Many of my clients are new to investing. They have a few funds picked out or they ask me to recommend a mix. Depending upon where they live – America – or the market they invest in – Canada or Australia – they may have access to a simple all in one fund. I use an all in one fund, the Vanguard Target Retirement 2045, for all my investments. These choices are fantastic!
Regardless of the funds you use, the key is, well, to get started! Get going! Now! In fact, for many of my clients that are starting with a modest amount, say 1,000 USD or GBP or EUR, or even 5,000 or 10,000, I recommend that they just buy one ETF to get started.
You can use something as simple as a two fund mix to develop a great low-cost portfolio if you can’t get it all in one fund. For “young” investors, which can be anyone in their 20’s 30’s and even 40’s, buying your stock investment – ETF – is fine. You may not need to buy your bond ETF or mutual fund for quite some time.
For example, if you are targeting an 80/20 mix of stocks and bonds (this means 80% of your investments will be in stocks and 20% will be in bonds), I recommend starting with stocks first. You can buy your stock ETF for maybe 3 months, or 6 months, or 1 year. Maybe even a year or two.
You can easily add in your bond investment later to balance out your mix to 20%. You can likely do this with one or two deposits. You have plenty of time to develop a nice, well diversified portfolio. And this will be important as you save more money and your portfolio expands.
But what is more important now is that you start saving and keep it simple. (If you can keep it simple in the long run even better!) Just buying your stock investment is a great way to get out of the starting gate quickly.
