The whole point of tracking a portfolio through 2019 is to be able to see the entire process from start to end. We will be able to cover the same steps that you would have to take with your own portfolio. Secondly, we will be able to see how the market reacts over time and what we will end up doing about it. Thirdly, we will see how we are able to re-balance the portfolio. Lastly, you can do this too with your own portfolio on www.investing.com .
Portfolio Initial Contribution and Monthly Contributions
There will be three rules to the portfolio. Rule number one is that we will start with a healthy $50 000 to invest. Rule two is that we will be contributing $800 per month. Our last rule is that we will be rebalancing only upon contributions to the portfolio. In other words, we will not review the portfolio mid month for any rebalancing. As a general rule of thumb, I prefer to re-balance a portfolio once per year if I am not selling or buying equities within the portfolio.
Portfolio Breakdown and Weightings
We will purchase assets from different asset classes. Part of our portfolio will be created from fixed income and the other section of our portfolio will be created from equities. The fixed income portion of the portfolio consists of 32% where equities are broken down in 3 different areas. 36% of our portfolio will be made up of USA equities where 10% of our portfolio will be made up of Canadian equities. The remaining 22% of our portfolio will consist of international equities.
All of our weightings will be made up of diversified ETF’s. This is a true balanced approach to index investing.
Selecting the Correct ETF Shares to Purchase
The first step is to determine the dollar value that you must invest in a specific ETF’s. You can use the Rebalancing Calculator to help determine the dollar value required. Once the dollar value is determined, the next step is to convert any currencies that are not in your base currency to the currency required in order to make a purchase. For example, if I am based in Canada using Canadian Dollars, the calculated value above will be in Canadian dollars. The next step is to convert the value in to USD funds if the ETF I plan to purchase is in US dollars.
The third step is to determine the amount of dollars per share required. In the video below, you can see how this is done. Next, the share total is rounded to a cleaner number to purchase.
The last part is to complete a final check in order to determine if your purchased shares match the original dollar value you plan to invest. Keep in mind that you will not achieve a 100% match due to rounding of values. This is completely normal.
Adding a Portfolio to Investing.com
From here, you simply hop on to the investing.com website and create an account. Under the portfolio section of the account you must create a portfolio as a holdings list. You can name this portfolio as you wish. Begin to add each of your assets in to the portfolio. Once complete you will have your portfolio displaying the total value at the top including daily and total profit/loss.