How Do You Choose Where to Invest?

There’s no one-size-fits-all

One of the challenges in building an investment portfolio is that there are thousands of stocks and thousands of mutual funds and ETFs out there. It’s a lot to choose from.

At the same time, some investors advocate for a simple portfolio comprised of just three funds or even just one. So what’s the right answer?

In my view, there is no single “right” answer; there are many ways to construct a sensible portfolio. I wouldn’t get too hung up on whether you have one or three or five or ten funds. What’s more important, in my opinion, is that you have an appropriate asset allocation, broad diversification and low costs.

As English philosopher Carveth Read once wrote, “It is better to be vaguely right than exactly wrong.”