Kevin Brothaler, 27
Occupation: R&D engineer, in software development
Portfolio: Core consists of Canadian and U.S. index funds, with rest spread over dividend-paying precious metals and energy stocks such as Paramount Energy Trust and Spartan Exploration Ltd. SPE-T
The investor:
“When I first started out, I placed my funds in balanced funds,” says Kevin Brothaler. “As I did more research on investing, however, I learned that passively managed index funds actually provided better returns over the long run.”
Andrew Hallam, a 40-year-old high school teacher and financial writer/blogger who became a millionaire through diligent saving and value investing, has been a big influence. (Mr. Hallam was profiled July 3 in Me and My Money).
Mr. Brothaler continues to educate himself on financial matters and shares what he has learned on a blog at investitwisely.com. Through reader feedback received on his posts, he hopes to further his own understanding and become a better investor.
His approach:
“I am young and my investment horizon is long, so equity index funds are where I am investing most of my cash flow. I am hoping to capitalize on the greater upside potential of the markets over the longer run.
“Although I keep my core investment position in index funds,” he adds, “I am also building up passive income on the side via dividend-paying stocks. I also invest in precious metals both for diversification and as an insurance policy.
“I love investing when the markets are down. I know that when the markets are down, I am getting a bargain on each unit that I buy.”
“Conversely, I start to grow cautious when everyone and their best friend start buying into something. I believe that Warren Buffett said it best when he said to be ‘fearful when others are greedy and greedy when others are fearful.’”
Best move:
“My best investment move was the day I started my investment journey and opened up an investment account.”
Worst move:
“My worst investment move was waiting until my mid-twenties to start saving money. By starting earlier, I would have been able to take advantage of compounding growth over time.”
Advice:
“Start saving as early in your life as you can. Starting early gives compound growth the time it needs to really work its magic.”
“I recommend a core portfolio of index funds. The evidence shows that low-cost index funds provide a better return, and this can make all the difference at retirement.”
