3 Ways My Investing Strategy Has Changed Over the Past 10 Years

I’ll admit that I didn’t really start investing in stocks until I was almost 30. Since I had to take on debt in the course of going to college, my goal in my 20s was to pay off that debt and then build myself a solid emergency fund.

Also, not knowing where life would take me, I began socking money away to buy a home once my emergency fund was complete. (Spoiler alert: I wound up meeting my husband in my mid-20s and we were able to buy a home together a few years later.) As such, I couldn’t really tie up too much money in stocks, because I needed access to that cash for specific purposes.

But over the past decade, my investing strategy has evolved quite a bit. Here are some changes I’ve made to my portfolio.

1. I’ve shifted from bonds to stocks

When I first started investing in my 20s, I put a bunch of money into bonds. The logic there was that I’d get a higher return than what a savings account would provide, but I wouldn’t be taking on too much risk. (Remember, I was investing money I expected to need on a short-term basis for home-buying purposes.)

But once I bought my home and settled into it, I immediately started putting my investing dollars into stocks. This isn’t to say that I don’t own a single bond now, but because I want to grow my money aggressively ahead of retirement, I’m more heavily invested in stocks to meet that objective.

I happen to be a fan of hand-picking individual stocks in my brokerage account because I know how to research companies and have specific metrics to follow. But if you’re new to stocks and aren’t comfortable choosing specific companies, you can fall back on broad market exchange-traded funds (ETFs) instead.

The upside of owning ETFs is that you get to invest in a whole bunch of different companies without having to research each one individually. It takes a lot of the pressure off when you’re first starting out.

2. I’ve been investing more consistently

When I started investing, I’d put money into my brokerage account when extra cash came my way, and I’d do my best to put as much money as possible into my 401(k) plan. Now, I pump money into my brokerage account consistently, and I make a point to max out my retirement account. In fact, I have my savings on autopilot so that money goes into my retirement plan before I have a chance to spend it.

I’ve found that investing more consistently had led to more opportunities. When you only invest a handful of times a year, you may run into a scenario where you’re buying stocks when the market is at a high. Investing on a regular, ongoing basis means I don’t have to worry about timing the market (a strategy that doesn’t tend to work out well for most people).

3. I’ve branched out into real estate

Owning real estate isn’t for the faint of heart. There are risks involved in owning income properties, like rising costs and the inability to find a tenant. And so owning real estate largely falls outside my comfort zone.

But I’ve still managed to incorporate real estate into my portfolio by loading up on REITs, or real estate investment trusts. When you invest in REITs, you’re buying companies that derive revenue by owning and operating different properties.

I enjoy having REITs in my portfolio because they make it more diverse. Even though I own stocks across a range of market segments, by adding REITs, I feel like I’ve branched out even more. Plus, REITs tend to pay higher-than-average dividends, and that’s been another selling point for me.

How will your investing strategy change?

Over the past 10 years, I’ve gone from being skittish about buying stocks to investing in them consistently. I’ve also made a point to learn more about REITs and add them to my portfolio.

If you have an investing strategy you’re happy with, you may want to stick with it. But it certainly wouldn’t hurt to assess that strategy every few years and make sure it’s still working for you.

If you’re decades away from retirement and aren’t seeing the growth in your portfolio you’re hoping for, you may want to go heavier on stocks, whether by scooping up shares of individual companies or putting your money into ETFs. And if you’re nearing retirement, you may want to make some changes that result in a more conservative portfolio.

The great thing about investing strategies is that they’re never set in stone. And you shouldn’t hesitate to change yours up as your circumstances and goals evolve.

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