Tutorial

Barbell Portfolio

The first moderate investment strategy that you should know is the Barbell Investment Strategy.

I think that the first thing is you should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.
— Ray Dalio

In Barbel investment Strategy you divide your capital into two parts.

  1. In the first part, you will find the investment objects you are sure of. If you do not want to take risks, invest in the lowest risk positions.

  2. In the second section, you determine the funds you can take to risk and invest accordingly.

There are no intermediate forms in the strategy.

The strategy is an easy way to learn about investment and keep in mind risk management. You risk only earning what you have set for yourself when you earn income. Thus, the possibility of negative surprises is minimized.

In the strategy, risk-free investments often rely on interest rate agreements, stable large dividend companies or gold. Physical gold is worth remembering for your total asset management.

I first came across this strategy as I read Nassim Taleb's books. He is a well-known writer who has created his career with derivatives.

 

 

Dividend based investing

A good investment choice with the long investment horizon is stable and dividend-paying companies. Ideal for this category could be the following:

  1. Invest, but don't rely on future promises.

  2. The company has a significant market position.

  3. The size of the company is large and stable.

  4. Pay Dividend - Plus if the dividend is constantly increasing.

In the strategy, the multi-year investment horizon highlights the dividend through the compound interest phenomenon. Whenever dividends come into your account, you invest them again to produce. As time passes, your original dividends will start paying you a dividend.

When looking for dividend companies, you should be wary of the confusing number showing the size of the dividend in relation to the market price of the share. Often, the low-priced stock isn't a good long term investment. The share price has fallen on the market because something, but they pay high dividends as before. This looks like a big interest even though the future of the company may be risky.

One popular way of choosing dividend companies is good. Buy the company to your portfolio which products you use yourself. Therefore, whenever you receive a dividend, you can think of it is as a discount on your own purchases.