Sample Investment Portfolios

Diana, one of my readers, asked me if I had sample portfolios.

I didn't really have any. And I guess the reason there are few or none out there is partly because a portfolio is a personal thing. It depends so much on factors specific to us: our situation in life right now (financial and otherwise), our life goals/dreams/aspirations, our experiences, and of course our knowledge of, and confidence in, various investment instruments.

So I can't just come out and say I've got the perfect portfolio for anyone. So basically I wrote a post just to say I'm not going to do something.

Just kidding! :D

In this article I'm going to give a simple investment portfolio template and also show how your investments can be tailored to your needs.

We'll outline some basic scenarios and see what the best investment portfolio for them would be.

Let's start with Barney. He's a college student, he's not married but he does have a girlfriend. He lives with his parents, receives an allowance, is not responsible for any expenses and generally spends what he gets. He doesn't have much savings, and the little there is usually gets spent eventually. However he did get a big windfall last Christmas from various relatives (10,000 total). What would be a good investment for him?

In my opinion his portfolio should look something like this:
a sample investment portfolio and how to tailor your investments to suit your needs

Why? He doesn't know much about investing yet. And he doesn't seem like he has developed the discipline to save either. And since he doesn't have any responsibilities yet, maybe a real-life lesson in the power of delayed gratification and compound interest could help nudge him in the right direction. So a multi-year Time Deposit at the highest available interest might be best.


Now let's look at Ted. He's single, mid-to-late twenties, employed, with a decent salary, he's got a girlfriend and he's planning to propose someday. He knows about all the different bank products and even has friends who are stock investors. He's already got a 6-month emergency fund (180,000) and an additional 300,000 in savings. What might his investment portfolio look like?

In my opinion, it can look like this:
a sample investment portfolio and how to tailor your investments to suit your needs

Since he seems to be responsible in his finances and even has his emergency fund, he can afford to invest the entire 300,000. Of course, he still needs to diversify.

And since he's got big expenses on his horizon, most of his money are in low to medium risk assets. If he gets married in 5 years or more, his equity fund would be ready by then. If he gets married within 5 years, his bond fund is there.

And since he's in good financial shape, and he's got friends who are stock investors and can mentor him, it might also be a good time to try out investing in stocks (not just mutual funds).

Of course, there are other ways for his portfolio to look, but this is a decent start.


Now let's look at Marshall. Early-to-late thirties, employed, has a good income, married, has one child, does not like banks, distrusts speculative assets (stocks, forex), thinks mutual funds are ponzi schemes, but thankfully owns his own home already, and somehow still has 500,000 in savings. What might be a good portfolio for him?
a sample investment portfolio and how to tailor your investments to suit your needs

There's a lot of ways Marshall's portfolio could be better. Unfortunately he distrusts most financial products.

However, we'll assume someone managed to convince him a savings account is much better than a piggy bank in securing his savings. So we'll put some there as an emergency fund.

In his case, he'll need a lot of insurance, which also fits his personality - he's not buying a speculative asset, but instead paying for a concrete service. And he'll really need to start his own business, because there's just no other way that his money will be able to work for him.


We could probably take on a few more examples, but hopefully those were enough to illustrate how to create a portfolio that fits your personality and needs.

And as promised, here's an Investment Portfolio template, in case you don't have your own yet. It's just a basic one, so feel free to customize and expand it.

And if you have questions, requests, or topics you'd like to see in the future, feel free to email me thru my contact form, or leave a me message on facebook or twitter or google+.


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2 comments:

  1. Whew! At last I was able to thoroughly ready this post :D Thanks a lot alam ko na kung anong kelangan ayusin sa portfolio ko :D

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    Replies
    1. You're welcome! Glad I could help. Happy investing! :)

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