Investing in the new year

A plan for putting money to work

A little over a week ago, I wrote about some thoughts for the coming year. In that post, I mentioned that I would be investing with the goal of beating the S&P 500 and attempting to do it with less risk (as measured by deviation of returns).

After writing about a lot of different market-related metrics this year, I think it’ll be even more interesting to directly tie my writing to a more focused investing goal. I plan to do that in a few ways.

First, I’m going to set regular buying periods for investments using two week intervals. This allows me to write regularly about what I’m investing in (and why) using a disciplined and methodical approach. I also think this approach of regular purchases is the best way for people to put their money to work because it turns saving and investing into a habit (versus say, trying to time the market by making large purchases or sales at various points due to sentiment or market behavior). The other thing regular purchasing allows for is better cohort/vintage analysis for each investment period.

Second, by having lots of buying opportunities throughout the year, analysis can take on a more active role by guiding future decisions and assessing previous decisions. I am not sure exactly how the rhythm will land but it could be a two week cycle where I mention what market metrics could be suggesting from an investing standpoint for a week, then invest, and then spend a week reviewing the portfolio as it stands alongside the new investments and their rationale. The cycle is going to be really fast but I think that will allow the daily newsletters to be even more relevant, timely, and informative.

Third, this approach allows me to build a brand new portfolio from scratch and share each step of the process. A lot of people have investments but some readers may not. Some readers may also be relatively hands off and just invest in broad index funds. But one thing I can guarantee is that all readers (and myself included) could always be doing better! No one invests perfectly - that’s a mathematical/statistical certainty. That means there is always room for improvement! I think by starting this process from the very beginning (versus analyzing a large portfolio that already exists) will allow for better analysis of the entire lifecycle and offer an interesting history for both new and seasoned investors.

Anyways, those are just some more thoughts on what comes next. I’ll be sure to share more thoughts as I finalize them in the next couple of months. The new year is just around the corner.