Categories: Investment

Investing Plan

This is my overview post on investing. It is a great starting post for you and in it you will be able to find many links in the future to posts that go into more detail and results of how well the plan is working.

I always enjoy thinking about investing money and I have played with small amounts of money in the past which looking back on it, it may not have been the smartest thing to do. I did learn along the way though and haven’t lost money. In light of this, I want to write out my investing plan for the future and then in subsequent posts, I will go into the details on why I made the decisions that I made.

Overall Philosophy

I believe that I cannot out pick others on which stocks are best to buy. I also believe that 90% of the population cannot do this either. This is why I will invest in indexes (an index is a whole bunch of stocks/companies with certain criteria that you can invest in at once). There will be some picking and choosing on which indexes I invest it.

When I put my money in, I will leave it there because I believe it is almost impossible to time the market. Buying when the general mood of the people is fear and selling when the general mood of people is positive, but this is difficult. Because of this, once I buy into an index I will stick with it. I will skip out on trying to tell when people are overly optimistic about the market and therefore sell my securities. I do figure thought that if I am going to by buy whole indexes anyways, I can at least attempt to pick one that is overly gloom and doom.

Portfolio Allocation

Holding Period1 Year5 Years10 Years30 Years
Percentage of portfolio invested  in Stocks50%61.6%88%116.2%

I will go into the details of how I came to this conclusion at a later date. You will be able to find that link here when I do.

Stock Selection

This probably could be the most fun part, but because all of stocks as a whole beat 80% to 90% of professionally managed funds, I will not be picking individual stocks. Instead, I plan on investing in etfs, or exchange trades funds. These are mutual funds that are traded on a stock exchange. They have certain advantages and disadvantages that I will talk about in the future.

I will be investing in 4 different etfs.

Vanguard Small-Cap Value ETF (VBR)

WisdomTree Emerging Markets SmallCap Dividend Fund (DGS)

WisdomTree International SmallCap Divident Fund (DLS)

SPDR S&P 500 (SPY)

I will lay out why specifically I chose these stocks in the future along with how I will allocate between them.

Bond Selection

When I am investing more on a short term basis, I will follow the allocation listed above and the money I do not have in stocks will be spread evenly in these bond funds. I will add to this as time and situation requires as bond rates change and are at historically low prices right now. These two funds are a good start and you will be able to find why I picked them here in the future.

iShares 20+ Year Treasury Bond ETF (TLT)

Vangaurd Intermediate Term Bond ETF (BIV)

How much to invest

I’ll have to admit that this is the area that I am the most unsure of now and that is because I am still a college student. One thing I do know is that I want to spend my money on assets and not liabilities as I receive money. Once I get to this point in my life, I will re-write this section of my investing plan and maybe a whole separate post expounding on it.

Final Thoughts On My Investment Plan

The goal is not to become rich or to hoard money for myself or to store up treasures here on earth. The goal is to be wise with my money and make use of what I have been given so that I can better help others. I hope I actually do this. Peace out.

What advice would you give me?

The Value Geek 2019