If you feel like you never have time to really delve into the tangled web of market investing philosophies, this is the article for you.
I will break investing down into seven modern methods and rate them on a risk scale from low to idiotic.
So, why are we discussing investing philosophies specifically? What does this have to do with making your money work for you?
Well, let's look at some of the common terms and questions people search for regarding this topic:
– How to invest 100K
– How does investing work?
– How to invest in the S&P 500
– Best way to invest 5K
– How to invest 50K
– What investment carries the least risk?
– How many stocks should I own?
The Fixed Income Method – A Very Conservative Strictly Bond Portfolio
“Fixed income” is another term for bonds. Remember, bonds are loans you make to governments or companies where they have promised to pay you a specific interest rate for the loan. The interest they are paying you is fixed and is also income, hence “fixed income.”
The Permanent Portfolio Method – A Mix of Stocks, Bond, Gold, and Cash
In the book, he outlines why he thinks you should invest all of your money in a simple asset allocation of 25% US Stocks, 25% Bonds, 25% Gold, and 25% Cash. If you get off track, you rebalance back to these portions once per year.
The Dividend Method – Cash Flow and (Hopeful) Appreciation Through Dividend Stock
This method is somewhat similar to the Motley Fool method in that your portfolio is made up of individual stocks. The difference is that these stocks would not be “growth stocks.” They would be very mature companies, often called “Blue Chip Stocks” (like Coca-Cola and AT&T).