A ‘newbie’ share player called Michael has asked me to reveal how people like me play stocks generally and have played stocks during periods such as the post-GFC period. It’s hard for me to generalise about how ‘old hands’ invest, as there are very different views on the market, varied strategies for individuals, dependent on their timeline horizons and appetite for risk, as well as their goals.
So, I’m going to tell Michael how I invest and I will compare and contrast with recommended advice from the best benchmarks of financial planning.
In for the long haul
In general, younger people like Michael, who’s in his early 30s, could easily be 100% invested in stocks. He has at least three bull markets during which it is pretty well certain his portfolio of assets will grow brilliantly, provided they are at least as good in their returns as the S&P/ASX 200 Index. My favourite chart proves my point: