In this post, we are going to talk about the solid proof and a strong foundation investment portfolio we can build in 2022. Within the last year 2021, the stock market has been run up very high which led to the question Is it a time to invest now? and since we are all don't know what is going to happen next in the stock market. All we should do is build a conservative long-term investment portfolio that can build your wealth over time and yet still can capture potential upside.
If you are a passive investor, all you have to do is buy the ETF that tracks the major index like S&P 500. That should be pretty good enough if you are looking to get the return from the market and passively manage your fund. ETF that tracks S&P 500 (VOO) return on average 8 to 15% yearly based on historical data. However, in this post, we want to talk about building a long term investment with potential upside and yet still pretty safe (risk resistance)
1. CASH 10%
Cash is safe and you can quickly liquidate into the stock market or other assets if you found a good opportunity. Having cash on the sideline means you have the type of cash that is ready for investing. This is not your emergency fund.
2. ETF (Exchange Traded Fund) 25%
ETF is basically a security that split investment all the pieces of stocks in the chunk of the ETF pie. For example, if you invest in VOO which is the ETF that tracks S&P 500 index it means you are invested in the top 500 US companies.
3. Blue Chip Stock 35%
Blue-chip stocks are Apple, IBM, Google, etc that have a large market cap and surely will exist in a long period of time. Blue-chip stocks have a good reputation, branding, consistent dividend payout, profitability, and growth.
4. Growth Stock 25%
Growth stocks are the stocks to expect to outperform the market but there are also some downsides during the market pullback. There are some characteristics of growth stocks such as revenue not proven and innovative products. You should understand the company, market size, and financials before picking up the growth stock you want to invest in.
5. Cryptocurrency 5%
There are many potential upsides to cryptocurrency investment. Therefore, you should not miss out on this.