How to create a simple investment portfolio consisting of 1-2-3 EFTS

You made orders in your personal finances and you are ready to put the money to work for you, to build an investment wallet. You want to invest monthly for your future tranquility or even financial independence, but it seems complicated, there are many terms, from what you try to document discovering that there is more and more information than not master.

However, wisdom is revealed, most of the time, for simplicity. We complicate that we want to seize all the opportunities when in reality the best investment is what gives us adequate performance (with which you feel satisfied and is reasonable for the effort and the assigned time) relating to the risk.

That is, if you are a man with an active and frenetic life that does not have the inclination, time, knowledge to use complex investment tools because you want to complicate your existence and lose their sleep peaceful?

If you are at the beginning of the road in investments or you are simply interested in a simple and easy to maintain wallet, which does not consume time and line the profit with the average performance of the capital market, you can opt on a simple portfolio with 2-4 ETFs.

The number of ETF depends on how many market segments you want to cover the degree of complexity you want to manage.

I will start with a very important mention, that is to say this It is not an investment suggestion. In no case should you make investments based on the advice from Facebook articles or YouTube videos. Listen, documented, analyzes and only then make your decision, taken.

The basic characteristics of a simple investment portfolio are as follows:

– Through it invested in two classes of activity: actions and tools for fixed income that may contain both state securities and corporate bonds.

The actions represent the most risky side of the wallet but which, historically, brings higher rendered both through dividends and increasing the value. On the other hand, the fixed income tools represent the most stable part but which bring lower yields. Keep them in the portfolio brings stability, because our goal is, in addition to the performance and not to lose money.

In general, the two, the actions and the obligations (we will appoint all the fixed income tools) are in the sense, when the actions increase the obligations bring yields lower and when the actions pass through a worst period (correction) the obligations increase.

– The distribution between the two classes of activities, shares and bonds, is 70% of shares / 30% of bonds for a long -term investor. Or if you have a higher risk tolerance and you want a higher return than 80% of bonds / 20%.

– We discuss a long -term portfolio here, at least 10 years using the DCA method (Costs in Avenranging dollars or the market market with small constant amounts).

The purpose of this portfolio is to provide the investor with a wider diversification within each class of activity using a minimum number of tools

Let’s also start from some investment principles:

• I will choose the ETFs with accumulation, because we invest in the long term and we do not want to complicate ourselves with the declaration of dividends. ETFs with accumulation reinsert the dividends received by the companies in the composition, compared to those with distribution that pay dividends in the investor account

• I will choose ETFs with full reply or sampling

• I will choose the ETFs with increase (asset under management) and a consecrated hand

• I will choose UCITS certified ETFs.

• I will choose the ETFs to cover emerging and emerging countries.

• I will quote to each ETF both the name that isin (univocal ETF identification code). An ISIN can have more tickets based on the bag in which it is listed

• In the article I will exemplify the ETFs, details on these finds on Justetf.com, It is advisable to check as much details as possible before deciding to invest. Just enter the site and in copy the ISIN code.

1. A portfolio formed by A Etf Singur: Accumulation of Vanguard LiFestraltegy 80% equity UCITS ETF (EUR) Isin IE00BMVB5R75

The 80% Equity Fund’s Vanguard LiFestrattegy covers both classes of activity in a single fund. It invests in different ETFs all over the world after the allocation of 80% of the shares in developed and emerging markets and 20% in fixed income bonds and tools.

If you prefer a more cautious allocation you can choose: Vanguard LiFestrattegy 60% Equity UCITS ETF accumulation Isin IE00BMVB5P51

Vanguard LiFestrattegy 60% Equity Ucits Accumulation ETF has a greater allocation of bonds, invest in different ETFs from all over the world: 60% in shares in developed and emerging markets and 40% are invested in bonds called or with coverage for euros.

The two ETFs have commissions of 0.25%/ year.

2. A portfolio formed by Two Etf. For this we will choose an ETF of actions that respond to the performance of global indices such as MSCI All Country World Index (ACWI) or FTSE All-World. The two indexes follow large and medium -sized companies of size from developed and emerging countries. So we have both geographical and industries diversification. In fact, this index does not cover small caps. Then we add an ETF for global bonds that follows the performance of the Bloomberg Global Aggregate Bond (EUR HEDGED) performance. This index represents

Ishares MSCI ACWI UCITS ETF Isin Ie00b6r52259

Vanguard Ftse All-World Ucits ETF Isin IE00BK5BQT80

ETFs have commissions of 0.20%/ year.

Ishares Core Global Aggregate Bond Ucits Etf Hedged (ACC) Isin IE00BDBRDM35

Vanguard Global Aggregate Bond Ucits Etf EUR Hedged Accumulation

ETFs have commissions of 0.10%/ year.

If you want to add an ETF that focuses on small caps (small companies) that we have for example:

Ishares MSCI World Small Cap Ucits Etf Isin Ie00bf4rfh31 This ETF replication index MSCI World Small Cap which follows the evolution of small companies in developed countries. This ETF does not cover emerging countries.

Examples can continue diversification.

You can choose to invest separately in an ETF with the exposure only USA (example ISHARES S&P 500 Swap Ucits Etf USD (ACC) OR Vanguard S&P 500 UCITS ETF (USD) Accumulation).

And separately in an ETF with exposure to Europe (e.g. Ishares Core Msci Europe Ucits Etf EUR (Acc)).

Great care when you invest in multiple ETFs that do not overcome that they do not overlap as a composition, because then you actually exposure to the same companies, you purchase more tools at all.

If you want to invest in a Romanian Etf, you will find more details in a previous article.

I know it is a long article, traveling it in peace, I wanted to bring a lot of precious information for someone at the beginning of the road.