There are various portfolio models designed by large investors, let’s see which one is that forever for you. Let’s start with the easiest of these portfolios. 60-40 Portfolio The idea is simple 60% stocks, 40% bonds. John Bogle was founder of Vanguard and creator of the first index fund. He has always talked about the […]
Category: Financial Independency 101
Portfolio Construction
We have finished all the premises and we can get to the point. Today we will see how a portfolio is built. For macroeconomic portfolio construction, there are 2 main lines of thought for doing this. Below you can see the 2 strategies. Of course they can be combined together to understand which are the […]
Economic Scenarios
Economic scenarios must be faced and understood, not escaped. Today we will deal with one of the most interesting topics for me the macroeconomic environments of the economy. There are four situations (one is divided into two because it gives different results on the economy) that are created by the possible combinations of inflation and […]
Fees and Taxes
Fees and taxes negatively affect returns significantly. Let’s see how. Broker Fees Fees are all those costs associated with your investment activity. The broker you use to invest is not a non-profit organization, but it earns from your operations. Let’s see what types of fees exist: Other special fees Taxes Well, you have earned and […]
Correlation and Diversification
Uncorrelated assets lower the investment risk. Let’s see what correlation and diversification mean for a moment. Correlation between 2 assets In finance, correlation is the relationship with which 2 investment instruments move. The correlation varies between +1 and -1.+1 means that the instruments move in the same way.-1 means that the instruments goes in exactly […]
Risk and Investment Funds
Put money into investment funds reduces the risk, Always. Why? Let’s look at the types of risks involved in investing in an asset and why diversification helps. Risk Risk refers to the possibility that the actual return of an investment differs from its expected return. There are two types: The risk premium for diversifiable risk is […]
Why invest in financial instruments?
You have to invest in financial instruments. Why?Now we see it. First of all, why do people invest?To increase the capital over time, but above all not to lose it.I think you know it, but central banks are aiming for 2% inflation to keep the economy enticed to grow. Why 2% and not 30%? It […]
The concept of investing
The concept of investing can be summarized in “allocating a resource, so that it can have a return in the future” .Simple and straightforward end of the post. Ok, that’s not true, it’s not that simple. Everything is investing I can allocate various resources, money, time, know-how and receive others in return.Examples of different investments: […]
Numbers to be financially independent
Today we need some numbers to understand how to be financially independent. Let’s start with a brief recap.You are financially independent if your assets make more than what you spend. FU Number Let’s start by imagining how much you spend annually to maintain your standard of living. Let’s put 24,000 (without currency which does not […]
Some basic concepts of finance
Today we will face the basic concepts of finance. They are not too much difficult, we need some basic maths and a little bit of statistics. #1: Return Here are two prices for stock A: A July August Price 100 101 We can calculate the **Stock A’s return = (**101−100)/100 = 1% in one month. […]