Portfolio Literacy is dedicated to transparency and promoting free financial literacy for everyone. Here are Portfolio Literacy’s latest blog posts. If you are looking for specific topics, the categories are at the bottom of this page.
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Investing Community Spotlight: BiggerPockets – The Real Estate Investor Network
Investing in real estate has become a popular avenue for wealth building, and platforms like BiggerPockets have emerged as vital resources for both novice and seasoned investors. BiggerPockets is a comprehensive online community that leverages the collective knowledge of a diverse group of individuals who share a common interest in real estate investing. The platform…
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Achieving Portfolio Critical Mass: My Strategy for Exponential Growth
Understanding Portfolio Critical Mass The concept of critical mass for a financial portfolio can mean different things to different people, some might say its once you cross $100K net worth, or even once your portfolio contributes more growth than how much you invest into it. To me, portfolio critical mass is when a portfolio contributes…
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What is Sequence of Returns Risk and How to Mitigate it in Your Portfolio?
If you intend to use money in your portfolio to buy a home, afford a wedding, or maybe you are getting ready for retirement, one financial concept you need to be acquainted with is sequence of returns risk. This term refers to the uncertainty and potential impact that the order of investment returns can have…
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Investing Community Spotlight: The Boglehead Philosophy
The investing world is filled with different philosophies and strategies, but few have garnered as much respect and following as the principles of being a Boglehead. Named in honor of John Bogle, the founder of Vanguard Group and a staunch advocate for individual investors, the Boglehead approach to investing is centered on simplicity, low-cost index…
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What is Concentration Risk and How Can You Mitigate it in Your Portfolio?
Concentration risk is a potential pitfall in investment portfolio management, manifesting when a significant portion of your portfolio is tied to a single investment, asset class, or market segment. Concentration risk is not inherently bad however, it is a negative opportunity that is present in your situation. It essentially magnifies your exposure to the risks…
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The Best Investment Strategy is Set It and Forget It: A Guide to Long-Term Growth
Investing can sometimes seem like an activity that requires constant attention and fine-tuning. However, having an automated ‘set it and forget it’ investment strategy offers a compelling counterpoint, advocating for a long-term, hands-off approach. By establishing a well-diversified portfolio aligned with your investment goals and risk tolerance, you can minimize the need for ongoing management.…
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VOO and Chill: Adapting Your Portfolio Strategy with Age
Investing in a single index fund, such as the Vanguard S&P 500 ETF (VOO), has become a popular strategy for its simplicity and potential to mirror the performance of the broader market. Often dubbed “VOO and Chill,” this approach advocates for long-term investing without frequent adjustments, under the assumption that the market will generally appreciate…
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Dividend Irrelevance: The Lack of Impact on Stock Value
Dividend Irrelevance Theory, a fundamental concept in corporate finance, conveys that the dividend policy of a company is inconsequential to its valuation. Pioneered by economists Franco Modigliani and Merton Miller in their 1961 paper, the theory points that the value of a firm is determined by its earnings and the level of risk of its…
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What are the Different Asset Classes to Know as you Begin Investing?
Investing can seem daunting, especially for beginners who are just starting out. With so many investment options available, it’s easy to feel overwhelmed and not know where to begin investing. However, investing is an essential step towards financial growth and security, and it’s never too early or too late to start. It’s important to begin…
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What is the Difference Between Asset Allocation and Asset Location?
Asset allocation and asset location are two fundamental concepts in investment strategy that have a profound impact on your financial planning and tax efficiency. While they may sound similar, they serve different purposes in managing your investments. Asset allocation involves determining the mix of investment types—such as stocks, bonds, and cash—that best suits your risk…