This is a portfolio I actually intend to build once the U.S. Federal Reserve is done raising interest rates. It will consist 70% of the S&P 500 index, one of the best market indices in the world as it offers exposure to 500 of the strongest companies in the U.S. If you look at the historical chart for the index you’ll find that its returns have been really good, & you’ll rarely find an investor or even a fund that was able to outperform it over the long-run.
The other 30% will go towards investing in gold to hedge against inflation & economic crises. It’s the best sharia-compliant substitute for U.S. treasuries. In fact, I might even split the 30% between gold & U.S. treasuries.
I will also make sure to check my portfolio regularly in order to rebalance it when needed. I aim to identify the best times to enter the market, dollar-cost average, & avoid market downturns.
The rebalancing will also help me make sure I stick to the weights I mentioned, allowing me to capitalize when either asset falls. Gold & stocks tend to have an inverse relationship. When gold prices go down & stocks go up, I’ll sell stocks & cost-average into gold, & vice-versa.
Of course, my portfolio has to be in dollars & must follow a long-term plan, but my strategy is to hedge against inflation & other economic crises.
* This article was not written by Thndr and does not constitute investment advice. You should do your own research before making investment decisions.