Studies of Life

Learning by doing.

Tag Archives for: etfs

Recalibrating to an evidence-based investment strategy

16 January 2016 by Jim

Those of you who’ve been reading my blog for a few months know that I love experimenting with stock investing strategies. While I was using the Trending Value strategy in my own portfolio, and constantly looking for a way to improve it further, I’ve begun to think that maybe the best way to improve my portfolio was not to be found in another stock selection factor, but instead in another direction.

According to many people, including the founder of Vanguard, a portfolio of passive index ETFs is the best approach for most people. I have more reason to believe Vanguard than other fund providers, because Vanguard asks significantly less for its service, which tells me it’s not in it to make a quick buck. I think Bogle really wants to educate investors. (more…)

How to Start Investing

08 November 2015 by Jim

I’ve been asked by a reader how to get started, and noticed that I haven’t yet talked about this in a general way, because most of the posts here are about specific investment strategies. So here is a more general approach for those who are still looking at how to get started.

# Starting to invest

  1. Earn more money than you spend
  2. Save the difference so you have something to invest with
  3. Invest that money

This is the first, basic set of instructions on how to begin. Before moving on, make sure these three steps are checked off on your list. It’s no use to invest when you spend every dime you earn. Never invest borrowed money! (more…)

A 30% Stabilising Slice in My Piotroski Portfolio

05 October 2014 by Jim

The last change I made to my portfolio last month was adding a 30% piece invested as a stabilising mechanism to weather difficult periods, crises and crashes. Until now I’ve been fortunate enough to never experience a real crash, mainly because I’ve only been investing in stocks since the beginning of 2013, but that’s the point: You need to prepare for the worst when you have the means of doing so, not when it’s too late. Because crashes will happen. And that’s fine by me.

So what is a stabilising piece, in my case? It’s an investment in long-term bonds, short-term bonds and gold. All three of those tend to not move the same way that stocks do, but rather in opposite direction. Gold is especially strong in crises, and bonds do not lose their value in crashes like stocks do because they are not stakes in a company but loans that have to be paid back no matter what happens. (more…)