In this video we are talking about 3 simple and straightforward investing strategies that ANY Average Joe Investor can implement today!
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Investing can be intimidating, especially for the average Joe investor who may not have extensive knowledge or experience in the financial markets. However, there are simple and effective strategies that can help anyone make sound investment decisions. In this article, we will discuss three straightforward investing strategies that are suitable for the average Joe investor.
1. Diversify Your Portfolio:
One fundamental principle of investing is diversification. This means spreading your investments across different asset classes and sectors to reduce the risk of loss. Diversification can be achieved by investing in a combination of stocks, bonds, real estate, and even alternative assets like gold or cryptocurrencies.
The key is not to put all your eggs in one basket. By diversifying your portfolio, you can minimize the impact of any single investment’s poor performance on your overall portfolio. This strategy helps protect against market volatility and increases the likelihood of achieving long-term financial goals.
2. Dollar-Cost Averaging:
Timing the market can be challenging, even for professional investors. Dollar-cost averaging is a strategy that allows the average Joe investor to invest regularly over time without worrying about market fluctuations.
Through dollar-cost averaging, you invest a fixed amount of money at regular intervals, regardless of the share price. When the market is down, your fixed investment amount buys more shares, and when the market is up, you buy fewer shares. This strategy evens out market fluctuations, reducing the impact of short-term volatility on your investment returns.
3. Invest in Index Funds:
For the average Joe investor who may not have the knowledge or time to pick individual stocks, investing in index funds is an excellent strategy. An index fund is a mutual fund or exchange-traded fund that aims to replicate the performance of a specific market index, like the S&P 500.
Index funds offer diversification by including a wide array of stocks within the fund. This means that investors can benefit from the overall performance of the market without the need to constantly research and analyze individual companies. Index funds also tend to have lower fees compared to actively managed funds, making them a cost-effective choice.
Additionally, index funds are a great option for beginner investors due to their simplicity and low maintenance. By investing in index funds, average Joe investors can participate in the long-term growth of the market without the need for extensive research or active management.
In conclusion, investing doesn’t have to be complicated or exclusive to finance experts. The average Joe investor can pursue a successful investment journey by following simple strategies. Diversifying your portfolio, practicing dollar-cost averaging, and investing in index funds can provide a solid foundation for anyone looking to grow their wealth over the long term. Remember, investing requires patience and discipline, so stick to your strategy and stay focused on your financial goals.
Hi AJ!
I'm a subscriber and I have a question please. I invest in FSKAX. I am tempted to add FNCMX. But before I do, I want to clear something up.
Regarding the snowball effect, is it best to stick to investing in ONLY ONE quality index fund?
If dividends are paid per-share, then the goal in compounding is to gain as many shares of a quality fund as possible right? I can accumulate more shares with FSKAX over time because it's less expensive and has a decent annual dividend yield.
If I add another fund to my portfolio, then that would mean that I would contribute less in FSKAX, thus slow down my accumulation of shares and snowball effect, right?
Thanks for your content!
For years I struggled with outstanding debts, bills and my children's school fees. I was at a point where I wanted to give up. I came across every YouTube channel about how to make and multiply your income through passive income. Fortunately, I had saved some money and decided to start an investment, Now I have bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that doesn’t believe in investing..
Are there any pros and cons to VFIAX vs VOO? The only thing I can see is there expense ratios, is there more to that, realistically speaking.
I like your format and delivery the most out of all the investment youtubers. There are other good ones, but most of them simply want to put their face on the camera rather than give good investment tips. I dont care if you combed your hair and worked on your body language all day, I just want to know how the stock market works without having to get another degree
Excellent video content you're providing.
My three M's.
Make your $$
Manage your $$
Multiply your $$
Hey Avg Joe,
What do you think about my strategy [that I'm slowly coming to after a year of watching, reading, fiddling with back-testing, etc.]?
People keep debating between yield, capital growth, and dividend growth. Often it seems like you can get one, but at the expense of the others. But, what if you can get more than one [two of them]? In particular, both capital growth and dividend growth … together?
Toward that end, I've been slowly compiling some watch lists on Seeking Alpha that include things like tickers with "fast capital growth," "slow capital growth," "flat capital," "fast dividend growth," "slow dividend growth," "flat/stable dividend," etc.
And now I'm kind of trying to find overlaps between "fast capital growth" and "fast dividend growth" to find a kind of "goldilocks zone" or "goldilocks portfolio." Where the 10-yr chart of stock price, and of dividend history both have relatively strong / stable [relatively non-/minimally-volatile] growth (as opposed to strong dividend growth but sliding share price, or heavy market volatility / swings). That way you get the best of both worlds (your capital appreciates, and your dividends get larger-per-share over time, and with DRIP, you end up getting extra shares as well [at appreciating prices and with expanding dividend payments])_
I've whittled things down to a kind of random sampling of some of the stocks that I feel like have both decent growth *and* decent dividend growth:
ADC, AEP, AMT, APH, ATO, AVGO, AWK, AWR, BIP, CCI, CCOI, CMS, CPK, DG, DHR, DTE, ES, FNF, IDA, ITW, KNSL, LLY, LNT, LOW, MA, MCD, MGEE, MKC, MRK, MSFT, NEP, PG, PLD, SBUX, SCHD, SHW, TRV, V, WEC, WM, WSO, WTRG. [I've tracked plenty of others to watch, but these seem like a number of the "more stable" ones without super huge or frequent swings / dips..]
In the Portfolio Visualizer Backtest Tool, I plugged in about 25 semi-random tickers from the list (the maximum the free tool allows in one comparison) at ~4% each, taking out tickers that didn't have history back to at least 2000 and adding tickers that did, and compared performance over a couple time periods (2000-Present, 2010-Present, 2020-Present), and it seemed to pretty roundly spank SPY, and traded blows with QQQ (it was a bit less consistent over just the last 3 years of the pandemic, but did come out on top after the market slump tanked QQQ & SPY), but generally outperformed both at the end of the period(s). Moreover, at the end of the period, the dividend income from the portfolio was about double or more the income from just SPY or QQQ alone.
Anyway, interested to hear what you think of the strategy [looking for stocks with strong, stable relatively straight line growth in *BOTH* capital (stock price) *AND* dividend, with minimal "volatility" swings].
Seems to me like it kind of gives the best of both worlds, equaling or outperforming QQQ while also giving strong dividend annual returns, at the end of the period (whereas QQQ & SPY give somewhat lesser dividends at the end of the period).
Would be interested to know which other tickers have similarly stable relatively straight-line growth in *BOTH* capital (share price) *AND* dividend payments? Like what are some best-of-breed tickers with stable growth in both and minimal volatility / swings / dips? Are there any with those features to the performance graphs that *also* have relatively higher dividend yields [beyond 5-7%+], without sacrificing growth stability [IE, not at the expense of higher volatility / swings / dips], that maybe I haven't heard of or considered yet? ^_^
I have made a lot of money in the past few years, in fact passive income is no longer an issue, the huge problem is how i loose this money from foolish diversification, this January I have already blown my account of a million dollars investing wrongly, last year i lost a total of six million dollars from very bad diversification, I believe i will loose all my wealth and not be able to build anything from my passive income,,, I need serious help immediately I cant continue like this…really needed to voice this out here.
I’m no longer waiting for the EDIL GRANT LOAN because I earn $34,700 every 10 days recently
I still have one question. does the year to date loss or gain shown on yahoo include of does it not include the dividends? QYLD shows a loss of 19% and a yield of 13%. Would that net loss be 6% or does the negative loss of 19% already include the dividends for the loss would be 32%? Thank you for all you do.
UNCLE JOE- Best to learn options so can have plenty to do in retiremet
Joe – Great info, thanks so much, Happy New Year!
Great video Joe. I’d be interested in how the different dividend payouts impact growth with DRIP. For example, would VTSAX grow faster because of its quarterly distribution or FZROX with its annual?
Dear Joe, i've been following you for some time and love your channel! i was looking at creating my own spreadsheet, but i struggle to find reliable, accurate dividend history data. Any tips where i miight be able to get that? Thanks!
thinking about it the expense ratios are higher from the target funds, because they are investing in their own funds, so you pay an 0.08-12 to them for balancing it for you, plus you pay the expense ratios of the funds owned within the fund.
most of these providers have autoinvestment, which can almost replicate the same almost (or like do it every 1-5 yrs)
My Roth is 100% SCHD. Gonna keep on keeping on with this for the next 30 years.
Great video, Joe! The S&P index option in my employer's 403b is MAEIX. I did a little research on it, and it looks under par. It has a high tax cost ratio and when I put it into yahoo finance comparing it with VOO, MAEIX is way behind in performance. Do you mind taking a look at it and giving me your thoughts on it, please? I'd really appreciate it! Thank you.
Awesome video Joe!!
Solid advice for the new year! I sure do miss your face, though. It gave the videos a more personal touch rather than all the meaningless B-roll stuff. Have a great 2023!
If you had to pick one dividend stock to do cover calls on which would it be?
Can you do a vid on how many funds is too much and how to condense a diversified portfolio?
Definitely a fan of my vanguard 2040 fund.
Happy New Year! Love your videos!
Why not all 3 and hold on. I have a Roth 401k through my employer. Vanguard target 2055 trust 1. Roth Ira that's vanguard based and my own coffee can portfolio.
Your videos have helped me greatly with how I handle my coffee can. Really thinking of making a patreon account just for your spreadsheets.
Can you make a video describing annuities I'm still new on that topic thank you