Let’s face it, not all of us want to spend our time building and monitoring an investment portfolio. If that’s you, here’s an option and a process to consider.
Select These Two ETFs For Your Investment Portfolio
|Equity ETF||VYM||Vanguard High Dividend Yield ETF|
|Bond EFT||VCIT||Vanguard Intermediate Term Corporate Bond|
Determine Your Asset Allocation
Take 100 minus your age This percentage of money will go to VYM. The remaining percentage will go to VCIT. Example: You are 40 years old. 100 minus 40 means 60% of your money will go to VYM and 40% goes to VCIT.
Fund Your Investments Monthly
Determine how much money you can afford to invest each month and at the end of the month buy shares in each ETF based on your asset allocation percentages. For example, if you have $100 available to invest at the end of each month put $60 in VYM and $40 in VCIT.
Reinvest All Dividends
Make sure to set your brokerage account up to reinvest the dividends each fund pays back into the ETF.
Once a year sell a portion of the ETF that exceeds its asset allocation and use the funds to purchase the other ETF. Example: At the end of year 1, VYM has $900 and VCIT has $400. Sell $120 of VYM and put the proceeds in VCIT.
This process is an effective approach to get started down your own investment path and watch your money grow over time.
Disclosure and disclaimer