It is so easy to get out in front of the readers until a few basic questions are asked. The fundamental questions bring one back to earth. Here are a few questions and I will attempt to answer them.
- How does one get started?
- What broker to use?
- How do I select securities?
- Should I use stocks, mutual funds or ETFs?
- How much should I invest in each security of choice?
- What is Position Sizing?
- If I am using the Kipling as a guide, which model should I use?
- How frequently should I rebalance the portfolio?
- Are there good investment books to read?
- Should I manage my own portfolio or relegate it to a professional.
- How important is it to save early.
These and many other questions are asked and answered on this blog. No matter how much I try, it is not possible to organize a blog as one would an investment book. The ITA blog is more like a newspaper where the latest information is posted on a regular basis. To review, here are a few clues.
- If you wish to read blogs on a particular subject such as Critical Material and wish to read the oldest posts first, go to Categories and select the subject. If you wish to read the most recent and work back to the oldest, use the search engine.
- Ask questions in the Comments section.
- Check the Forum regularly and request unread messages.
- Follow two or three portfolios and keep abreast of all new posts.
- In the bottom left footer look for the most read posts over the past year.
- In the bottom right footer look for random posts. Pick one out each day that you find of interest. If there are none, take a pass.
A. How does one get started? The first move is to save money. If one is not doing this, there is nothing more to report. I’ve written several blogs on The Golden Rule of Investing. Check it out.
B. What broker to use? Definitely use a discount broker who has commission free ETFs. Schwab and TD Ameritrade are the two I use. Others can add their favorites. Vanguard is one to check out.
C. How do I select securities? This is not an easy one to answer. My preference is to use ETFs. Selecting individual stocks is somewhat of an art and it requires considerable study. I did this for a number of years, but much prefer the more diversified route of ETFs. ETFs are used for the majority of securities on this blog. However, one portfolio (Dirac) is made up of individual stocks.
The ETFs are selected primarily on the basis of asset classes they cover. We also seek ETFs that have low expense ratios. When possible, we also choose ETFs that have low correlations with each other. Search “correlations” for more information.
D. If I am using the Kipling as a guide, which model should I use? My recommendation is to break the portfolio into sub-portfolios and use different models. Take $1,000 and use the Dual Momentum model. Take a second $1,000 and use the LRPC model. Use the BHS model with a third $1,000.
E. How frequently should I rebalance the portfolio. There is some evidence that it behooves one to rebalance on the last business day of the month. Since I am working with so many different portfolios, I rebalance them every 33 calendar days. The Carson portfolios are rebalanced on the last business day of the month.
F. Are there good investment books to read? I’ve written several blogs on this topic and here is one list.
G. Should I manage my own portfolio? If you are already here, the answer is yes. The cost of professional management is higher than you think. Here is one post on the topic. Search for “management fees” to find other blogs on this subject.
H. How important is it to save early? Check out the link found in A above. I mention this twice as it is the most important rule of investing.
From time to time I will add to this subject. This should launch some of the new Platinum members.
In addition to the above, check out the Feynman study and search for all the parts discussing the LRPC model. These posts were written by HedgeHunter. All are worth reading.
Ask questions in the Comments section. There is no better way to learn than to be curious and ask questions. This is not the time to be bashful.