Investing as easy as ABC

ETFs make it easier than ever for Do-It-Yourself Investors of all Income levels to achieve financial freedom

Is investing as easy as ABC? Below are three simple portfolios built using ETFs for three different types of investors. Read on and see what works for you. Generally speaking, most investors construct their portfolios using a combination of stocks, bonds and cash. Depending on your goals, the proportion invested in each may change.

ETFs can provide investors with the tools to create portfolios on their own, with significant advantages over mutual funds and individual stock picking, especially for newer investors. Click here to learn about the advantages of ETFs.

Let’s look at three portfolio examples that are as simple as ABC!

A. All equity (Stocks)

A portfolio of all stocks may be appropriate for younger investors with longer-term investment goals and the time to reach them. Investors may select from a wide range of stock ETFs, with different regions and focus. Below is an example of a simple all equity ETF portfolio equally invested among 5 ETFs diversified by geography.

All Equity Asset Allocation Example 
Stocks100%
Bonds

 Region/Focus%
SPYU.S. Equity30%
IVVU.S. Equity20%
EFAInternational Equity20%
VGKEurope Equity20%

All Equity Asset Allocation Example

  • SPY, 30%
  • IVV, 20%
  • EFA, 20%
  • VGK, 20%

B. Blend of stocks and bonds

A portfolio balanced between stocks and bonds is a more moderate approach to investing. By adding bonds to a stock portfolio, investors, may achieve a smoother ride on their journey to financial freedom. The trade-off is that less stocks generally means less risk, which typically results in lower potential return. Below is an example of a balanced portfolio constructed with only ETFs.

Blend of Stocks and Bonds - Asset Allocation Example 
Stocks60%
Bonds40%

TickerRegion/Focus%
SPYU.S. Equity10%
IVVU.S. Equity10%
OUSAU.S. Equity10%
EFAInternational Equity10%
VGKEurope Equity10%
IWMU.S. Small Cap Equity10%
AGGInvestment Grade Aggregate Bonds10%
BNDInvestment Grade Aggregate Bonds10%
LQDInvestment Grade Corporate Bonds10%
VCSHInvestment Grade Short Duration Corporate Bonds10%

Blend of Stocks and Bonds - Asset Allocation Example

  • SPY, 10%
  • IVV, 10%
  • QQQ, 10%
  • EFA, 10%
  • VGK, 10%
  • IWM, 10%
  • AGG, 10%
  • BND, 10%
  • LQD, 10%
  • VCSH, 10%

C. Conservative, invested mostly in bonds

A portfolio consisting primarily of bonds may be appropriate for investors looking to preserve the value of their investments and who have less time to achieve their investment goals. Income generation maybe more important at this stage of their lives.

Conservative Asset Allocation Example 
Stocks30%
Bonds70%

TickerRegion/Focus%
SPYU.S. Equity10%
EFAInternational Equity10%
VGKEurope Equity10%
AGGInvestment Grade Aggregate Bonds10%
BNDInvestment Grade Aggregate Bonds10%
LQDInvestment Grade Corporate Bonds10%
VCSHInvestment Grade Short Duration Corporate Bonds10%
TIPInvestment Grade Inflation Protected10%
PFFPreferred Shares10%
MBBInvestment Grade Mortgage Backed10%

Blend of Stocks and Bonds - Asset Allocation Example

  • SPY, 10%
  • EFA, 10%
  • VGK, 10%
  • AGG, 10%
  • BND, 10%
  • LQD, 10%
  • VCSH, 10%
  • TIP, 10%
  • PFF, 10%
  • MBB, 10%

These are three simple examples of portfolios for three different Beanstox investor types that can be built easily using the Beanstox app.