For a lot of people this post will sound very naive, but I’m just starting to figure this out for myself, so please bear with me (and correct me if I’m wrong!).

I was interested in investing since I was 16, but was either too busy or too clueless to do it. Measly $2,300 worth of stocks are really nothing to brag about (I’m including a chart of our current stock holdings anyway, because I like illustrations).

This year I decided to systematically approach investment planning, and I’m putting together a list of books I’ll be reading on the topic of investing and wealth planning in general.

So far all I found out with any degree of certainty is that a portfolio must have a balance of CASH, BONDS and STOCKS. The exact balance should be determined by your age (mainly), because it tells you how much risk you should be willing to take to maximize your return on investment in your working years. Then of course there are things like the desired retirement age, current income and expenses, and desired income in retirement.

Portfolio components: Safety, Income, Growth

• Safety = Cash
• Income = GIC’s, Term Deposits, Bonds, T-Bills etc.
• Growth = Equity (Stocks, Mutual Funds)

Okay, so when they talk about Cash, Bonds and Stock, they may call it as “Safety, Income and Growth” – same thing.

Pretty clear on Safety and Income categories. I’m still figuring out Stocks.

And here’s some eye candy: