How Should I Invest at 30?

4 min readJun 3, 2020

I am roughly the same age. At this time you go for the long term investment horizon. Therefore you have the ability to take more risks for higher returns (in content). So a portfolio should match this aspiration.

This is how the guideline tells you to invest for time frame and risk,

This is taken from the Australian financial planning guideline (the British and American ones aren’t too precise on portfolio and more how much you should have in a mortgage and house at that age).

As your time frame, would realistically be over 10+ years and 6% + CPI that stand in developed countries at 2% (8% total).

This is how I would break it down for the selection of funds in mine and clients portfolios

When picking funds in my portfolio, I use two indecent rating agencies (as one can be bais) Morningstar as they use the following methods see quote below.

Morningstar is a leading global provider of independent investment research, conducted by a team of over 100 fund analysts worldwide. Morningstar is highly regarded by investment experts for its in-depth research which can help you assess different funds and their potential role in your investment portfolio. Their analysts employ a rigorous appraisal procedure which is reviewed on a regular basis.

They are highly experienced and recognised in the market as providing a clear focus for the investor through the quality, independence, and depth of their research.

Morningstar | Empowering Investor Success

As well S&P as a large validated agency following the selection process.

This gives two independent views on the funds and as to whether it’s reliable to meet the return objective and professional view of the fund.

Then always ask further questions

Has it produced the return its objective has claimed over the last 5 years?

If its a global equity fund in your 30s, it should be 5–7% annualized. Has it achieved this? If its a fixed interest stability has it produced constant positive results with little volatility.

Has it outperformed the market or benchmark?

80% of global equity managers fail to beat the S&P500.

In both bull and bear markets and one of the criticisms is that funds are highly correlated to the movements, has your fund beat the returns. On both upside and downside.

So why consider a fund that fails to beat its benchmark or is to highly correlated for the movements as might as well use a lower-cost ETF or index tracker.

As a rule general rule look for 0.5% over the benchmark as this will pay for the fees.

What is the fund's size and rating?

Then go further and look at the rating (global equity large-cap) needs to be over 3 stars (by at least one of the two rating agencies unless an alternative investment or specific case like right now went into a low ranked oil ETF).

The fund's size?

Have at least 500 million under management (unless an alternative then normally 50 million + is okay).

Company

Buy a reputable company, I mean one with past results that have good corporate governance that has long term suitability. Ask yourself does the company has proven results in this sector and will be around in 10 years.

Why is this fund unique?

Why is this better than investing in the market itself or bench market why is this better.

This is a recent example I use from a fund to judge why I would go into it rather than a tracker.

Example

A recent example I have used for a client X is, (this by no way financial advice as is dependent on your specific portfolio and needs and aspirations and individual circumstances) and would seek financial advise first.

See how is is weighted and the funds have been selected accordingly for the presences with different sectors.

A good tip is when creating or finished a portfolio to check by portfolio X-ray to make sure it’s not to highly correlated. It should come out something like this