How to Create an Investment Portfolio in Your Early to Mid-30s

Video Transcript

"Hello, my name is Roger Groh. I'm with Groh Asset Management, and thank you for spending a few minutes with me this morning, to discuss how you should build an investment portfolio in stock if you're in your thirties. Well, from my point of view, from the portfolio managers point of view, it always comes down to risk, meaning historically at least once every ten years, you get at least one, fifty percent, that's where prices go into half, decline in stock markets. Can you wake up tomorrow and find out that you're hundred thousand dollar investment, or million dollar investment has declined in half? If the answer's yes, then you will not need the money when you're at the bottom, then you can handle being a hundred percent stock when you're in your thirties. On the other hand, as you get older, and you're in your sixties, and seventies, and eighties, when you're likely to begin to need that investment capital, you can't handle that fifty percent decline, and as a result, we suggest that you own just less stock. Maybe the same companies, but just less of them. And, a greater percentage of the portfolio, and very short term bonds, very high quality short term bonds such as treasury bills which will limit your downside and the volatility will be decreased in your overall portfolio. Now, what should you buy? Well, you're in your thirties, you have to think what kinds of businesses are going to do well over the next forty years, and fifty years. Well, you have to think technology is going to continue to grow as a major component of our lives, and there are many well known equipment companies and software companies involved in that business. Name a few, perhaps Oracle Corporation, or S.A.P. Corporation on the software side, if you like hardware, how about Hewlett Packard, or maybe Apple. I'm not suggesting that you buy any of those companies, you'd have to do your own research on them and determine when that appropriate was. But, nonetheless, they are high quality names that are likely to do well longterm. Other areas that might be of interest would include the drug business. You know as we get older, and we, and our bodies get a little crankier, we're likely to continue to use more things like Aspirin, or Advil, or perhaps the new type of Advil that comes out in twenty years, whatever that formulation might be. Much less the more pharmaceutical drugs that will let us live longer, as we grow older. In all likelihood, we're going to be prepared to spend our last dollars on drugs in order to continue life, so the demand should grow. Clearly in most of the world today, they don't have access to those, and they're going to want them, so it would seem to be a growth business longterm. So, that's a little bit about how to build an investment portfolio in your thirties. If you can handle fifty percent down, you can be a hundred percent stock. I'm Roger Groh and I hope this helps, thank you for spending a few minutes with me."