By request from a follower, this is the first "newbie" post. The intention is to give an actionable, bare-bones, approach to investing. This is not to say that a more in-depth approach isn't more preferred - it is. It is always worthwhile understanding what you are doing. ,Along the way I'll mention how to get a more in-depth understanding without having to take a graduate course in investments. Fortunately, we've had some really smart people break down this process in readable prose.
Step 1 - Decide on the percentage of assets to invest in stocks and bonds. A popular asset allocation is 70% stocks/30% bonds. Asset allocation goes a long way towards explaining investment performance.
Here is a link to a simplistic asset allocation tool: asset allocation tool. Play around with it. Slide the little triangles and watch the pie pieces change in size.
Look at the questions it asks. Tomorrow I will shed more light on what is going on and what the questions mean.
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