5 Steps to a Pro-Level Portfolio – Tips from Amundi
In our latest podcast, we sat down with Dominik Blunschi, Senior Sales Manager for ETF, Indexing & Smart Beta at Amundi, Europe’s largest asset manager, to discuss building a successful portfolio.
On our Podcast “What Your Bank Doesn't Tell You”, Dominik shared actionable insights on how to grow your wealth with ETFs and a long-term strategy. Here are the key takeaways to get started on your investment journey!
1. Define Your Investment Horizon and Risk Tolerance
The first step in building a portfolio is to set clear investment goals and determine your time horizon. Ask yourself: Are you investing for years or even decades? For long-term goals like retirement, a core portfolio is essential. Make sure to only invest money you won’t need for day-to-day expenses, so you can weather market fluctuations with ease.
2. Build a Core and Satellite Portfolio
A proven approach is to create a core portfolio—a stable foundation with broadly diversified investments, typically through ETFs, that can grow steadily over time. Surround this with satellites, tactical investments in specific themes like future mobility or dividend ETFs. The core lays the groundwork for long-term growth, while satellites offer flexibility to capitalize on short-term trends.
3. Leverage ETFs for Diversification and Low Costs
ETFs (Exchange Traded Funds) are an excellent tool for cost-effective and diversified investing. Dominik emphasized that you can now find an ETF for almost any investment goal, from global indices to niche themes. A popular core choice is the MSCI World ETF, which focuses on developed markets. If you want to include emerging markets, consider options like the MSCI ACWI or a dedicated Emerging Markets ETF.
4. Consider Regional Allocations
Globally diversified ETFs are often heavily weighted toward U.S. equities, which can lead to volatility. To optimize your portfolio, you can adjust your U.S. exposure by investing in separate ETFs for the U.S., Europe, or emerging markets. This allows you to customize your diversification to suit your goals and market conditions.
5. Patience and Discipline Are Key
Dominik highlights the importance of a long-term perspective: “It’s about time in the market, not market timing.” Regular investments, such as through an ETF savings plan, let you benefit from the cost-averaging effect, smoothing out price fluctuations over time and reducing the impact of market swings.
Conclusion
Building a portfolio that works for you in the long run doesn’t have to be complicated. The key is to be clear about your goals, risk tolerance, and time horizon. Start simple—with a diversified ETF as your core—and gradually add components as you gain experience. This approach will set you on the path to successful, stress-free wealth building. Take the first step today and let your portfolio grow with confidence!
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