Most investors are either in Wealth-Building Mode or Wealth-Protection Mode. Here is the difference.
1) Wealth-Building
If you are still working and your timeline to achieve financial independence or retirement is 5 years away or more, then you are in “Wealth-Building Mode”. In this case, you should try to create a focused portfolio of stocks. Tykr’s job is to help you find safe value stocks that can build your wealth and avoid weak speculative stocks that can lose your money. The goal is to beat the returns of the S&P 500 (about 10% per year), which is very easy to do with Tykr. In other words, Tykr is here to help you build your wealth in less time.
Number of stocks to hold in wealth-building mode: 10 – 15
What annual returns should you aim for: 15% – 50% per year (Returns are not guaranteed)
2) Wealth-Protection
If you are at or near financial independence or retirement, then you are in “Wealth-Protection Mode.” In this case, you should try to invest in more stocks, invest in dividend stocks, or consider investing in ETFs or Index Funds. The goal is to match the returns of the S&P 500 (about 10% per year). In other words, Tykr is here to help you protect your wealth.
Number of stocks to hold in Wealth-Protection mode: 15 – 30
Number of ETFs or Index Funds to hold in Wealth-Protection mode: 3 – 5
What annual returns should you aim for: About 10% per year (Returns are not guaranteed)
Important notes:
- Warren Buffett made his first million by investing in about 10 stocks.
- Today, Warren Buffett’s company, Berkshire Hathaway, owns about 40 stocks.
- In summary, as your net worth increases, you may consider owning more stocks, ETFs, or Index funds, but keep in mind your returns will most likely decrease.