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CIO Blog

By Paul Hrabal, Chief Investment Officer of One Fund

September 23, 2009

World Class Investing On Any Budget

Today any investor can build themselves a world class quality portfolio at a low cost regardless of how much they have to invest.

With only a small amount of money in an IRA account, an individual investor can build an investment portfolio that rivals someone with substantial resources and who has help from a professional money manager.

All you need are some well chosen, low cost index funds and some basic calculations about what money you will need and when.

As explained in 80% of Investors Get It Wrong, index funds may provide investors with broad diversification and potentially high returns compared to picking individual stocks or hiring a mutual fund manager to pick stocks for you. In a single index fund it's possible to own, for example, the entire U.S. stock market.

And with a small collection of index funds, you can own most of the world stock and bond markets if you desire, diversifying across countries and industries, developed and emerging markets and investing in companies of various sizes from large to small.

The keys are to select the right index funds that are low cost and broadly diversified and to allocate your money appropriately based on your financial goals and risk tolerance.

In terms of allocating your savings, in the Keep It Simple Guide To Investing we suggest:

1. Set aside a cash reserve for emergencies in an amount equal to 6 months of living expenses.

2. Consider investing money you need within the next 15 years in bonds.

3. Consider investing the remaining money in stocks.

The Guide explains in further detail the reasoning behind these suggestions in an easy to understand way that can be applied to your own situation.

So whether you have $1,000 or $100,000 in savings to invest, there is no reason you can't have the same world class investment portfolio as the wealthiest among us.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus. Please read the prospectus carefully before you invest.

An investment in the Fund is subject to risk, including the possible loss of principal amount invested. Other Fund risks include asset allocation risk, foreign securities and currency risk, emerging markets risk, small-cap, mid-cap and large-cap risk, trading risk, and turnover risk that can increase Fund expenses and may decrease Fund performance. The Fund is, also, subject to the risks, which can result in higher volatility, associated with the underlying ETFs that comprise this “fund of funds”. Newly organized, actively managed Funds have no trading history and there can be no assurance that active trading markets will be developed or maintained. Brokerage costs will reduce returns. When the Fund invests in Underlying ETFs, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the Underlying ETFs’ expenses (including operating costs and management fees). Consequently, an investment in the Fund entails more direct and indirect expenses than a direct investment in the Underlying ETF.

Distributed by Foreside Fund Services, LLC.