Tess Waresmith. founder of ‘Wealth With Tess’ had started her investing journey in her mid-20s and made mistakes most often. She was involved in investment learning as most people do through trial and error. Confused with her investment, she kept on relying on the financial advisor who charged her high fees but underperformance as an outcome, an overly complex portfolio.
As she gained knowledge, she realized that she could do better on her own, and once she took control of her investments, things flourished. With the majority of her assets spread among Real Estate, Crypto, and Stocks, Tess Waresmith’s portfolio totals $1 million.
Anyone who wants to replicate her investing success should start simply before slowly expanding into new areas suggested by Tess Waresmith. Waresmith says, “My no.1 philosophy is to learn as much as possible about anything you are interested in and diversify.” Let’s understand what she actually means and suggests.
Tess Waresmith: Start With an Index Funds and Slowly Diversify
Tess Waresmith took the initiative by investing in Index Mutual Funds and exchange-traded funds, which still make up the bulk her of stock portfolio. Two reasons make Index Funds investing a favorite.
Firstly, they are truly cheap. Because these funds don’t require hiring a high-priced manager to run the portfolio as these funds merely aim to track the performance of the market index. That means investors pay very little, in some cases 0.03% of assets or lower, in annual fees.
Secondly, new investors, are very easy to gain access to a large swath of the stock market. For instance, buying so-called “total market” funds gives you the exposure of a total of 95% of the U.S. stock market.
The case of broad diversification is very simple. Owning a large variety of assets decreases the risk, that a downturn in any single of them could shake your overall portfolio.
Waresmith says, “Index funds are a great way to get started and to understand the basics of the stock market and to get your money invested in a really diversified, low-fee way. Once you have done that, I think it’s a great jumping-off point to continue to learn.”
Waresmith’s much of investing falls in real estate, but you don’t need to start buying properties to broaden your horizons and diversify your portfolio beyond the basics of index funds.
“If you have a good portfolio and you want to take a little bit of money and learn, there’s so much power in knowledge, “Tess Waresmith says. “I’ve never discouraged someone from exploring other opportunities outside index fund investing. You just got to know the risks.”
“Most of my investments are in Index funds, but I do have a small portion in crypto, and I do buy some single stocks or market-specific ETFs, “Waresmith says. “I’m interested in women’s health ETFs or cannabis ETFs, and so I’ll invest a portion in those.”
The more you educate yourself about the workings of different corners of the market you are interested in, she says, the better. Just make sure you have a solid foundation first.
Expanding into riskier investments “is not something I would necessarily suggest to someone just started out, “She says.
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