Investing Strategy for Beginners | Diversify, Earn, and Grow | Rob Armbruster | Skillshare

Playback Speed


  • 0.5x
  • 1x (Normal)
  • 1.25x
  • 1.5x
  • 2x

Investing Strategy for Beginners | Diversify, Earn, and Grow

teacher avatar Rob Armbruster, Investing and Personal Finance

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

9 Lessons (26m)
    • 1. Introduction

      1:58
    • 2. Start with a Dream Final

      1:32
    • 3. Investment Types

      4:10
    • 4. Diversifying Industries

      2:17
    • 5. Determining Your Risk Tolerance

      2:41
    • 6. Investing Through the Decades Part 1

      4:10
    • 7. Investing Through the Decades Part 2

      3:17
    • 8. Circle of Competence

      2:52
    • 9. Next Steps

      2:33
  • --
  • Beginner level
  • Intermediate level
  • Advanced level
  • All levels
  • Beg/Int level
  • Int/Adv level

Community Generated

The level is determined by a majority opinion of students who have reviewed this class. The teacher's recommendation is shown until at least 5 student responses are collected.

240

Students

--

Projects

About This Class

I believe that anyone can manage their own investment portfolio with a bit of good instruction. I've intentionally made this class on investment strategy simple and easy to understand without complicated graphs and terms. You will come away from this class with an investment strategy that will last through the decades. In this class I'll cover:

  • Start with a Dream
  • Investment Types
  • Diversifying Industries
  • Determine Your Risk Tolerance
  • Investing Through the Decades
  • The Circle of Competence

Recommended Resources:

This lesson is not considered licensed financial advice. It is purely for educational purposes to help you to manage your own investments. Future trades that you make are done at your discretion. Music provided by bensound.com.

Meet Your Teacher

Teacher Profile Image

Rob Armbruster

Investing and Personal Finance

Teacher

When I was 24 years old I was sitting in an office with a financial advisor. After he showed me the fees associated with him investing my money, I left the meeting feeling uncomfortable with his proposition. This is how my investing journey started. I began to research how to successfully manage my own investments and found that it was easier than I thought. Today, I'd like to pass on what I have learned over the past seven years of managing my finances to you. 

I have a passion to help people from every race, ethnicity, and background discover their ability to make great wealth! My classes provide the basic fundamentals of making great long-term financial decisions. Please follow this page so that you won't miss any of the great resources coming out in the future!

... See full profile

Class Ratings

Expectations Met?
  • Exceeded!
    0%
  • Yes
    0%
  • Somewhat
    0%
  • Not really
    0%
Reviews Archive

In October 2018, we updated our review system to improve the way we collect feedback. Below are the reviews written before that update.

Why Join Skillshare?

Take award-winning Skillshare Original Classes

Each class has short lessons, hands-on projects

Your membership supports Skillshare teachers

Learn From Anywhere

Take classes on the go with the Skillshare app. Stream or download to watch on the plane, the subway, or wherever you learn best.

Transcripts

1. Introduction: I made this class because I have believed that anyone can manage their own financial portfolio with a little bit of good instruction. I've intentionally made the strategy behind investing simple and easy to understand. A lot of times when people talk about this topic, there's over complicated graphs and terminology that's honestly hard to understand. This class will be different. The strategies themselves are really easy to understand. You're gonna come away from this class with your own long term investment strategy. It all starts with a dream, and we're gonna talk about how having a vision for where you want your investments to go is so important when you start out staying close to remembering the purpose of why you're doing it in the first place. Then we'll talk about the different types of investments that you can make and how to diversify. Your investment portfolio will also look at different industries, then will determine your risk tolerance with every season of your life. Your investment strategy should adjust in change, and so I'm gonna go over some recommendations that I make how you should change your strategy through your twenties, thirties and beyond. Then I'll and the class talking about the circle of competence, diversifying but still remaining in a place where you're competent and where you know what you're doing and you know what you're investing. 2. Start with a Dream Final: Ah, great investment strategy starts with a great dream. I want you to ask yourself why you're looking to do this and then continually come back to that throughout the process. It's so important to dream and be like, What could my future financial be like 10 years from now? 20 years from now? This important thing about casting conditions is vision gives pain purpose. So, for example, if you're working out, you have a vision of the type of body and the type of weight that we want away. That's actually continually in my mind as I I'm actually envisioning that, and that's helping me give a purpose to the pain that I'm experiencing as I'm working out. And it's the same for vestments having the vision for where you wanna go. You know, I want to be home. I want to be able to provide for this member of my family or my immediate family or whatever it might be. Take some time to sit down and think about what is the most important thing to me, and how can my investments lineup with supporting the vision that I have for my life? 3. Investment Types: Let's talk about how to diversify your portfolio to include multiple different investment types. A different type of investment is also referred to as an asset class, the definition of an asset class. It's a grouping of investments that are guided by the same laws and exhibits similar characteristics. Stocks would be an example of an asset class or bonds would be another example of an asset class. For an in depth look at how these asset classes function. You can look at my first class investing for beginners, and that is a great starting point to get more information on this. Here's the list of the asset classes that will be included in this course. You have options and commodities stocks, mutual funds and E T. EFS bonds, CDs and money markets. Options and commodities are the highest risk investment and their contracts that you write based on the price of a commodity or the price of a stock. What you're investing in fluctuates and is very high risk because it's based on when the contract ends. The second highest risk of investment is stocks. You're investing in one singular company. So if something were to happen with that company, the investment would go way down. On the other hand, with the risk of investing stocks, comes the reward. If the company does really well, you get a greater reward for taking the risk of investing in a singular company with a stock. Mutual funds and E T efs are a bit of a different game, their funds that are collection of different stocks if one stock goes down, actually, that the E T F fund won't necessarily go down with one stock, but it's gonna be more diversified and a safer investment. That's one of my favorite asset classes toe have for a long term portfolio. Now bonds are a very secure investment, and you can invest in different institutions. The number one bond giver is the United States of America, and it's a very secure investment. It's a it's a great investment to make because it pays off 10 years down the road or 20 years down the road. CDs, money market and savings accounts are the lowest risk investment that you can make because it's insured by your bank. You're guaranteed to get the rate of return your offered, but the other thing to keep in mind is the return that you'll be receiving is a lot less than returns earned by stocks. Mutual funds, E. T. ETFs are options. A lot of times there will be people who are older who will choose to invest in certificates of deposit or money markets because that guarantees their money. They're not as focused on growth, but they're more focused on maintaining what they have. You can choose your investment mix based on how much risk that you want to take. But I would recommend investing in multiple different asset classes, such as stocks, mutual funds and bonds. And having that, I'll be part of your portfolio that allows you to minimize risk, but then also pick certain areas where you would like to maximize your 4. Diversifying Industries: let's talk about what it looks like to invest in different industries. There's one thing that happens with investors that are just beginning and just starting out . They have a tendency to invest everything into the one industry that they have a background in. I want to encourage you not to do that. For example. Say you grew up working in retail. It's sometimes really hard not to invest your entire portfolio in Target or WalMart or the other retail stores that you know our great companies. I'm not saying that you shouldn't invest it all in them. I'm just saying that all of your eggs shouldn't be in a one basket of one industry. I want to encourage you to branch out and invest in multiple different industries. Here is a list of what I would categorize the seven different industries that you have an opportunity to invest in. There's technology, finance, retail manufacturing, agriculture, transportation and health care. If there's one of those industries that you're interested in and curious about, I would encourage you to start researching that industry and having fun. I'm looking into it and learning about it branching out from the one or two industries that you have a really good idea of. This will make sure that your portfolio will be more diversified for the long term because you won't be subject to a downturn to a certain industry. For example, of finance industry in 2008 collapsed. If me, as a finance person invested all of my money into that industry, it wouldn't have been good. But luckily, I didn't just wanted to encourage you have fun, branch out and learn more about these different industries that you have an opportunity to invest. 5. Determining Your Risk Tolerance: All right, let's look at determining your risk tolerance. Some people enjoy taking less risk than others with investments. That's not entirely wrong. One person isn't right over the other person, but it's making a strategy that fits for you and determines the amount of risk that you want to take. Stocks and options are the highest risk investments that you can make. CDs and bonds are the lowest risk investments you can make, and then right in the middle is mutual funds and E. T s. It's up to you to choose what percentage of investing you want to take in which asset class to take either less risk or more risk on a personal thing that I would like to say is E. T. Efs are a great investment because they're a group of stocks, but often times over the long run, they increase in value. But you don't have to take the risk of owning a singular stock, just something to keep in mind as you're choosing how much you want it, invest in stocks or bonds are options. I'll also just tell you about my own risk tolerance. I don't invest in options because those are beyond my risk tolerance. I don't like to take that risk, but I actually invest a lot in stocks. That is a higher risk investment. But I like doing that because I can know where the money is going and know which company it's going to. A stock is creating something valuable, and it's creating a product. Maybe you might be older in age, young and spirit of older and age, and you want to invest in lower risk investments. And your strategy is more focused on maintaining rather than gaining. And so you would choose to purchase certificates of deposit, money markets and high yielding savings accounts as well as bonds and maybe some E. T s. Those air Some thoughts. But I want you right now to sit down and determine your own risk tolerance by looking at the different types of investments that you can make and the risks associated with 6. Investing Through the Decades Part 1: thats next section of the classes. So great, it was the one I had the most fun creating its how to invest through the different decades of your life. Your strategy should change as you get older for investing. This next section is gonna give examples of how it will change as you get older and how your investment strategy becomes more conservative, more protective of what you've earned as you reach that higher age. Also, not being afraid to take certain risks at a lower Here are the newcomers, and these people are in their twenties. You've just gotten your first job. They're graduating from college, still figuring out what you want to do with your life. What does investing strategy look like for a newcomer to investing? Here are the examples of a suggested portfolio for a newcomer. It's a higher risk than other investors because tomorrow is going to be better than today and you're just starting out. So why not take a little bit more risk with what you're investing? But as you'll notice on the left side of the graph, there are mutual funds and bonds that are more conservative investments. So you're not having 100% in the basket of taking high risks. But you have some that you have ready for the future and better lower risk so that you can take these investments into your thirties, forties, fifties and expected return for a newcomer investment account like this would be 20 to 40% because it is high risk. And next you have the world changer. These are the people in your thirties. You're beginning to start to figure out what you want to do with your life. You're figuring out your career. Earnings are increasing, your also coming into your own with friendships, relationships finding out what's important to you. This type of investment account is a little bit different because it's more conservative than the newcomers, and you're starting to think about what the future could hold for your investment. And if you look at this, you still have a lot in stocks mutual funds, and this suggested mix contains both high risk and low risk investments, and a portfolio like this could earn anywhere between eight and 20% returns per year. Let's look at the leaders now. These are the 40 year olds out there, and you've become a leader in your life. When you get to your forties in whatever capacity it looks like for you, your investments change with that. And as you can see, they're more conservative than when you're in your thirties, because you're starting to actually create that foundation for what you're gonna take into retirement with your investment in your forties. Up in this recommendation that I make it, you still have 35% in stocks that has the potential took row during your forties. And so this is a great account for growth and your focus more on mutual funds and bonds, which are lower risk. It's a fascinating time of your life and a time that I'm looking forward to. 7. Investing Through the Decades Part 2: next is the kings and queens and these other people in their fifties and sixties. Investing changes when you become a king and queen, maybe even a CEO or a president or a leader of a nonprofit. As you're investing, it changes the way that you approach. Investing a king or a queen is beginning to think about their legacy, and you're beginning to think about what do I want to leave behind for the next generation , and that reflects in your investment strategy. The suggested strategy I put here still has an investment in stocks, but it's even more focused on bonds and mutual funds. And it also has CDs and money markets in this investment account, which are investments with guaranteed returns. It's a fascinating time. I just want to give a shout out right now. If you're in your fifties or sixties and a king or a queen just want to say thank you so much, you're amazing, really. The race and the dreams of what you're gonna do with this are really just beginning, and the last group of people are the grand parents. Let's take a look at what your investments look like in your seventies and eighties. There's your grandparent's right there, and as grandparent's you're so focused is mostly unknown, Leaving that legacy for your next generation. You're not so much focused on gaining and not so much focused on taking different risks. But you actually want to Stewart of what you turned. Well, the good news is, is that if through your lifetime you set aside and make investing a priority by the time that you get to the Grand parents stage, often times the amount in your account is more than a $1,000,000. So you don't want to be messing around with that and throwing that all in options or stocks . The suggested investment mixture that I have for grandparent's focuses mainly on bonds and CDs, and these are investments that are incredibly stable and incredibly liquid that you can start taking out and removing your money from these investments and using it as you're not working anymore and using it maybe even to spoil your grandchildren a little bit. I hope you found these investment portfolio suggestions helpful for seeing how they change through the seasons of your life. Keep in mind that these are just my suggestions. Everybody's actual portfolio varies from these suggestions. One thing I will say to is it's never too late to start. It's never too late to start in Boston, and now is a great time. 8. Circle of Competence: Ted Williams was one of the greatest baseball players toe ever play the game. He had the highest on base percentage, which, for those of you that don't know baseball, means that he somehow or other through a walk through a hit through whatever happened, ended up on base, the highest percentage of times for all players all time. And he still holds that record. How did he do this? He used what's called the strategy of the circle of competence and what this is. He would Onley swing at hitches that were in his sweet spot. Even if other pitches were strikes, he wouldn't swing at them because he was waiting for his pitch when there was a pitch coming at a certain place in the strike zone. He would have a much greater chance of hitting it then, if it was coming in the lower right hand corner of the strike zone, if a pitch was coming in the middle of a strike. So he has a much higher probability of getting a hit than a pitch in the lower right hand corner of the strike zone and the same is true for investments. All of us have our circles of competence. I'm not gonna go outside of that to invest in something that I don't know or I'm not sure about whether that investment wins or loses. I'm just gonna wait and choose the companies and choose thean vestments that are in my sweet spot. So what I want to say to you too, conclude, this lesson is, yes. Diversify your investments, get investments in different industries and different types, but develop your competence and develop your expertise in a certain area. Go with that and stick to that area. As you learn more, you can row your circle of competence. It doesn't have to stay with a single industry the way that Ted Williams knew that that pitch is gonna be a strike. But I'm still not gonna swing out because I have a lower probability is what I want you to do. If an investment looks amazing and it's awesome, all other people are talking about it. But it's outside of your circle of competence. I give you full permission, not swing at that. I'm so confident that you're gonna take this and be able to develop your circle of what you're comfortable invested 9. Next Steps: Here's what I'd like for you to do to get the most out of what you've learned in this class . I've created a class project for you that you could find below. And in this project, I want you to create two pie charts One pie chart for this current decade that you're in of investing. I want you to choose the percentage of what you would like the different asset classes of your investment to be over the next 10 years. And I'd like you to make a second pie chart with what you would like your asset classes to be in the next 20 years. I've created the sheet low, and so you could download back and use that to compete. Complete the assignment. Really, it's just for you to put into practice what you've just learned. There's class Resource is that I used to make this class. One of them is the article on the circle of competence that talks about the Warren Buffett strategy of investing. I've included a link to that. I also included a link to the Robin Hood investing platform. It's the platform that I use and recommend. It allows you to invest and make different trades for free. And so other platforms will charge five or $10 per making a trade. And this one you could do unlimited trades for free, and the link is there. If you would like to open up an account with that, you don't have to, but it's available for you if you like. The other thing I want you to do is leave a review for this course. Tell me what you liked about it, what you learned. And then if there's anything that I could improve on for future courses, I would love to. So please leave a review, and the last thing is, come back and refresh yourself on this course. If a lot of times as you jump into creating a strategy, you find yourself needing to come back and refresh yourself and say, What did Rob say about that? There was so much great information in this course that there's no harm in coming back and refreshing yourself on what I talk. This course have fun going out there and making your new strategy. I have full confidence in you that what you're gonna make is gonna be great for you. Make sure to dream big and then follow through. Thanks