Investing Strategy
My stock portfolio sits untouched, compounding while rental income covers my expenses. Here's the boring but effective strategy behind it.
Core Principles
ETF-Focused Strategy
I don't pick stocks. I buy broad market ETFs and hold them forever. Simple, boring, and incredibly effective over time.
Asset Allocation
My portfolio is primarily US total market and international funds. Bond allocation increases as I age. Nothing fancy.
Growth vs Income
In accumulation, I prioritize growth. In retirement, my real estate provides income so stocks can keep compounding.
Why Dividends Aren't "Free Money"
One of the most persistent myths in investing is that dividends are somehow "free money" or passive income from stocks. They're not.
When a company pays a dividend, the stock price drops by exactly that amount. You're essentially getting your own money back. It's a forced sale with tax consequences.
There's nothing wrong with dividend stocks, but chasing high yields or thinking of dividends as separate from your principal is a cognitive trap that can lead to poor decisions.
Total return is what matters. How it comes—dividends or appreciation—is just accounting.
Sample Allocation
This isn't advice, just an example of a simple three-fund portfolio: