What factors should I consider when choosing a portfolio? (HK)
You may think about your portfolio needs by thinking of three main factors:
Essentially, you are asking yourself, “What do I want this money to do?”. Do you want this bucket of money to grow passively over a period of time for retirement? Or perhaps you’re hoping to establish a steady source of income with this money? Your answers to these questions serve as the foundation upon which you can build an investment portfolio.
You need to assess “How much risk are you willing to take?”. Can you stomach your stock investment portfolio going down by over 40% in a crisis and stay the course? If not, you probably should not be invested in 100% stocks, and need a balanced portfolio of diversified stocks and bonds.
The question “how long can I keep this money invested?” is an easy but helpful one. This would also help determine your risk appetite for this bucket of money as well as the type of portfolio that is suitable for it.