We update our portfolio weekly. We update the website on Monday morning. We send out an email on Friday before the stock market closes to those who want to act on the update sooner (sign up here).
Our updates are meant to be super simple and only consist of two numbers you should pay attention to. A % for stocks and a % for bonds. See an example on our Home page. Each of those percentages represents how much of our portfolio is invested in each. If we have $100,000 and our portfolio is 60% stocks and 40% bonds, then we have $60,000 invested in stocks and 40% invested in bonds. If you wanted to match our portfolio, all you would need to do is multiply your account value by 60% and 40% to get how much you should have invested in each.
We invest in ETFs to keep things simple. We use the investment VTI for our stocks and TLT for bonds. Keeping the example going, we’d have $60,000 worth of VTI and $40,000 worth of TLT in our portfolio.
Let’s walk through a quick example with Bob to make it super simple.
(Don’t worry…if you hate the math part, there’s a link to a calculator to do the math for you at the bottom of this page.)
Bob is brilliant, he signed up for our email list so he receives our portfolio updates as soon as we make the changes. He receives the latest update on Friday around 2:00 PM. The Green Apple Investment Society is updating their portfolio to consist of 80% stocks and 20% bonds. He signs into his investment account website and sees that his portfolio gained 1.2% last week. Nice! His portfolio is now up to $236,500.
Bob completes the following calculations:
He now knows he needs to invest $189,200 into VTI and $47,300 into TLT. Bob sees that VTI is currently trading at $100/share and TLT is currently at $125/share.
Bob completes the following calculations:
If this is Bob’s first time following the Green Apple Investment Society portfolio, then he’d purchase 1,892 shares of VTI and 378 shares of TLT. He could certainly round down a little if he wanted to make round numbers (i.e. 1,890 and 370).
However, if this is not Bob’s first time following our portfolio, then he already owns some VTI and TLT. In that case he’ll need to subtract out what he already owns before calculating how much of VTI or TLT he needs to purchase. For this example, we’ll assume that Bob already owns 1,669 shares of VTI and 556 shares of TLT.
(Don’t forget about the calculator at the bottom of this page.)
First, Bob needs to sell 178 shares of TLT (556 – 378) and then he needs to purchase 223 shares of VTI (1,892 – 1,669). His portfolio now consists of 1,892 shares of VTI and 378 shares of TLT. Perfect!
It’s good to know how to do the math, but doing it by hand is overrated. Click here for a link to a handy calculator that will do all the math for you.