My strategy for building an investment portfolio in 2021 that is both robust and provides a big potential for growth.
I have a somewhat different approach to investing to many people. I have no interest in day trading or short term investing and I do not aim to time my investments or earn money on price swings.
My entire philosophy is to invest well for the long term.
I am interested in investing in companies that will provide me huge upsides over several months or even years because of what they can do in their industry.
My investment strategy focuses on building a portfolio that can grow substantially but also provides enough stability to ensure there is a sufficient emergency fund available and a large proportion of the money is invested in established companies that provide stability.
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CHAPTERS
1. Introduction - 00:00
2. Emergency Fund - 03:05
3. Index ETF - 07:57
4. Behemoths - 09:47
5. High Growth Squared - 11:54
6. Growth Potential - 14:24
DISCLAIMER: Some of these links may be affiliate links. If you purchase a product or service using one of these links, I will receive a small commission from the seller. There will be no additional charge for you.
DISCLAIMER: I am not a financial advisor and this is not a financial advice channel. All information is provided strictly for educational purposes. It does not take into account anybody's specific circumstances or situation. If you are making investment or other financial management decisions and require advice, please consult a suitably qualified licensed professional.

What's up you guys, sasha here i've worked in senior positions and advised and consulted some of the world's largest banks and financial services companies for many many years and now i do youtube to go and share some of my thoughts and personal opinions on personal finance. With you now today, i want to talk about the best way to structure an investment portfolio in 2021. From my perspective, it's really important to remember that this is just my opinion. I am not a financial advisor.

I can't provide financial advice to you and, if you do need actual financial advice, make sure you go and seek a qualified professional now before we jump into the numbers and the distributions, let me cover a couple of really important points now. Point number one is investing your money does carry a risk. Putting your money in the stock market can mean that you may lose quite a large part of it if you're investing in the wrong things, if you're investing in the wrong way or even if you are not doing anything wrong at all, and there is a giant Market crash your money could be wiped out. You could lose 50, you could lose 90, you could lose 100 of the entire amount invested in just a few seconds.

Crashes do happen. Sometimes they happen when people expect them sometimes to happen when nobody expects them and in 2021 there might be one coming soon. There may not be a crash at all. We might be growing for the entire year.

Nobody really knows, but it's really important. So i wanted to mention it up front, and the second point is you can't become wealthy just by doing investments. Investments are a great way to grow your wealth as long as you keep putting money into it. As long as you keep investing over time and adding more money into that portfolio, if you go and put 100 pounds in it up front and wait 50 years, i can tell you right now: nothing much is going to happen, sure it will grow and it might Be 500 pounds or even 5 000 pounds, but you are not going to be some kind of millionaire.

Investing is a great way of growing assets that you've already built up, so you've earned somewhere else. You've done some work somewhere, you got paid and you put the money into investing, but you won't become rich just from the investing activity alone. Now talking about the actual investment portfolio. The really important point i want to make up front is that i don't do short term trading.

I don't do day trading, i don't invest on swings, i don't care about fluctuations and price. I don't try to time the moment when i buy things or when i sell things. I have no interest whatsoever in doing that. I have better things to do with my time and i have better things to worry about.

I believe that there are a million different reasons why stocks can go up and down some of them. Some people may sort of be able to know or predict many of them. People will have no idea, because there's institutional investors with their priorities and there's internal company issues and there's just opposition different things. I don't really want to play there because that's not my thing.
I invest for the long term, i'm interested in investing in companies for long term value where the money i put in today can be worth way more, sometimes like multiples more sometime down the line, i'm interested in companies that go places where the products and services they Deliver go and completely kill it in the industry that they're in that's the kind of thing i'm interested in i put in money today and in some months i've gained 10, 20, 30, maybe even more percent on that money. That's what i'm after now, the first money to allocate out of an investment portfolio has to go towards some kind of an emergency fund, and here i have a slightly different way of thinking about it, to perhaps something you've heard from other people, and that is, i Don't believe the entire amount of your emergency fund has to sit there in cash, doing absolutely nothing losing money because of inflation and just being a colossal waste of money, especially if you don't have that much money in the first place. I think there has to be a sweet medium, and i kind of believe that you should have about two months worth of money that is always available in cash either in your current account or a separate current account. You hold where, if you need cash on a sunday night and it needs to be urgently there and you can't use cars and and whatever else reason you can go and access that cash, you can go and withdraw it from cash machines.

You can go and transfer the money over to whatever bank account. That's required. I don't know, i don't care what reason it is. Sometimes you need that money, and sometimes you need it urgently, and i feel like having more than a month's worth is quite important, because one month is quite a tight amount, but i don't think having more than two months worth of money sitting in cash is really Particularly practical because a lot of people will tell you that they think that your emergency fund needs to be three to six months depending on the person you listen to.

When i hear this kind of thing, i kind of think in my head. Well, that is a long time, because why are you holding that much cash for an emergency because you might go and lose your job? You might have some kind of unfortunate incident or accident or issue with your family where suddenly you need a load of money in the next few months and you don't have it at that moment if you don't have an emergency fund, but here is the thing: if You do have funds elsewhere, that you can liquidate relatively easily relatively quickly and get that money from those places or, if you're able to go and spend money via other means without having to have pointless cash sitting in your account. Is that a better strategy, and in my opinion i would say yes now? I am by no means advising people that they should go and get into debt if they get into some kind of trouble because they haven't saved up enough cash. But what i would say is - and this is what i personally do is - i have several different options available to me as part of my general emergency planning.
I have a few different credit cards that i constantly have. Some of them have zero percent on purchases and their percent of money, transfer offers and all kinds of other weird and wonderful things, and i have those credit cards sitting there always because i can always go and use them in addition to the two-month emergency fund that I just covered, and i'm not saying that i should go and build up a balance on them and then be paying interest and things like that. But what i'm saying is those allow me to go and spend money at a point when i may not have the funds to immediately go and spend if something breaks in my house and i have to spend 6 000 pounds to repair it, and i don't happen To have that money sitting there, i can go and use a credit card to go and spend a while. I am getting my funds out of sources where they're not immediately available, but are still somewhat liquid, for example, in investments and, generally speaking, if you have two months worth of time in order to source additional funds for the moment that you need money to pay.

For your living expenses, beyond that two-month period, i would say that any general investment portfolio probably can be liquidated and you can go and get your money back out in those time frames. So i don't think that you need as long a window if you have cash available in other types of relatively liquid assets, as some other people will say. So, let's use a typical example for a family that, for example, spends 2 000 pounds a month on living expenses. Let's say: there's like a 700 or 900 pound mortgage electricity utility bills, food whatever it is you're spending 2 000 pounds on just being able to sort of live and being able to afford your relatively normal lifestyle.

I would say in that circumstance, if it was me, i would have four thousand pounds available either in the bank account as a minimum buffer and a separate bank account or somewhere in a basically cash equivalent, and then i would make sure that, on top of that, Four thousand pounds i then have another eight thousand pounds available in credit limits or in some other easy to use way. I'm not going to go into the depths of that, but i like credit cards because they're very very easy to explain in this circumstance and then i want to make sure that i have at least eight thousand pounds worth of assets that i can then liquidate in Order to cover that gap and not have to build up balances and credit cards and not have to get into any kind of debt. So using the exact same example, the family, that has say 2 000 pounds worth a month of living expenses. I would be targeting somewhere around 40 000 pounds plus in terms of saving slash investments and out of that i'll then dedicate 10 percent, essentially to my cash fund that i just mentioned and that'll be my first part of my overall investment portfolio.
That 10 would be sitting there doing exactly nothing for that one moment when you really urgently need it. The next part of my strategy is to take the next 10 and allocate it to a stable, long-term growth index. In my opinion, i quite like the s p. 500, that is the listing of 500 largest companies in the us, according to a few metrics and parameters as to how companies get entered into that list.

But i really like that index because over long periods of time it consistently delivers sure it drops just like any other investment, but then it recovers and then it grows. And if you had all your money invested into the s p 500 in 2020, you would have had a growth of over 17, which is phenomenal, and that is certainly one of the better years. But even talking on average, including the drops and including bad years, you can still reasonably expect your portfolio to grow seven to nine percent before inflation every single year, which is which is pretty good and and actually probably will do fine for most people. If you don't want to be an active investor, if you don't want to be picking stocks, if you don't want to manage your portfolio, if you don't want to do research on which companies you want to invest in and stuff like that, just putting your investments in An index like the s p 500 will achieve still really really good results.

In fact, if you look at any number of studies over time, just investing in the index will, in the vast majority of cases, beat trying to beat that index through active investing, because a lot of people will invest with fund managers which in some cases is a Really bad idea, because those fund managers will return far less than if you just stuck it in the index and some people invest in companies that they know or that they are familiar with, and they don't think about the stock market in maybe the most profitable kind Of way and as a result, there will sometimes invest in companies that don't grow and don't really pay much dividend yields because they're like the stability of dividends, but those dividends are only paying two percent rather than being able to earn, say seven. Nine. Seventeen percent per year instead, so after those first twenty 20, the next 20. I invest in what i call the behemoths and the behemoths for me are companies that are really giants in their industries.

They are the market leaders with absolutely nowhere in sight trying to even get close to them. They are dominating, they are performing year after year. They have huge capitalizations, they have massive assets, they have huge customer bases, they provide a multitude of different services and different offerings and they are there to stay they're there to stay there, not gon na disappear overnight. They control the ways entire countries work and entire industries work.
That's where i put 20 of my money now there's one critical thing here. I only put my money in behemoths that are in industries that are not in some kind of decline and that's really important and probably different to a lot of people, because a lot of people like to have their money in large petroleum companies, for example. I don't carry any money in those companies, because the overall industry over the long period over say the next 20 30 years is going to be in decline. Sure some of those companies will transform themselves and, for example, some of them might become big energy players.

Instead of just being focused on petroleum as their primary industry, but i don't know which companies are going to be doing that yet not many of them are doing that much in that space. At the moment some are trying, but not many are doing that much so at the moment i don't have any money in those and i don't generally invest in any companies where the industry they're in is in the process of shrinking or declining. So in my particular portfolio, some examples of these companies that i'm mentioning that, i would say, are behemoths in their industries. Are companies like google, microsoft, coca-cola pepsi apple those types of companies where, if there was a risk to their existence or a risk to their share price or a risk to you, know them being the dominant player, you would see it from many many miles away.

You would have lots of time to adjust your strategy to maybe reduce your holdings or withdraw money all together. Generally speaking, these types of companies are incredibly robust in the long term and that's why i have the first 20 invested in there. So the first 40 percent we've already dealt with now. We need to deal with the next 60.

now the next 40. I would invest in what i call high growth squared companies and i'm gon na try to explain this as quickly as possible. For me, high growth, squared is a strategy where you pick companies that are already established already large, already really really big in the industry, but not quite at that behemoth level, but where those companies are still growing very aggressively, but not only that here's a squared bit. I also wanted to be in an industry that itself is growing really aggressively as well, and then, if those companies do well, then my expectation is that i get the multiplicative effect of the company growing within their industry and then that industry also growing relative to, like The world and, as a result, the multiplication of those two factors can yield really really big results.

Examples of companies that i would class in this particular bracket that i have 40 of my money in are companies like adobe amd, nvidia, pinterest, slack square and some others that i hold as well. Let me give you a really brief example: the world of remote working has been growing massively and the world of people being able to do one-off, gigs and people hiring people, not as employees, but as some kind of contractors or for fixed-on projects. That world has been growing for some time, even before 2020 happened, but it's only being accelerated now by what's going on, people are more happy to be working remotely. People are more happy to be hiring people for a very specific task and, as a result, there are more people who are working from home or from small offices local to where they live with their own gear, and some very high skilled work is still being carried Out by these people, so things like engineering work things like modeling things like various complicated computational maps, type work, things like video, editing and processing and various other types of high skilled work that require very powerful computing and for most of these types of work, some of The hardware required is provided by specific companies and, in the case of pretty much all the examples, i mentioned the two companies that are completely dominating this space and are continuing to grow their margins.
Even though they're pretty much already dominating the entire thing are amd and nvidia. But not only is this process happening in developed countries, but developing countries are coming up from being largely product-based to an increasing amount of services being provided and done in those countries and as those countries move into the service world, they will begin adopting the same types Of business models and they will require all the same gear to do the same kinds of work anyway. Enough of that example, i now have 20 left and the last 20 percent i invest in what i would say are the high very high potential gray stocks. These are not very established companies.

These are companies that are typically going to be up and coming. They are potentially disrupting an industry where they're a small player versus some much larger players that do something similar, but potentially in a different way. They will often not be as mature. They maybe will be only a few years old.

They potentially will have fluctuating financial performance. Their products are still maybe going to be somewhat raw, maybe not quite as established, but these companies, in some cases based on my personal opinion, have really really high opportunity to grow, and i put the last 20 of my money into these companies because the returns can Be ridiculously big to give you a few examples of companies that i would have in this category. They are pinterest that i hold a smile, direct club and twilio. I'm not going to go into the details, but each of them has much much bigger competitors.

Much much bigger industries that they're trying to disrupt they're trying to change behavior and people are really liking. It and people are beginning to really turn to it and they're getting lots of traction but they're still early on in that transformative journey and in each case the majority of their potential customer base is still using other services and still using other tools and still using Other providers and that's what i really like, where their opportunity is, to grow really really rapidly for several years from now. So that's it that's my 100. I hope you guys found this useful.
If you have please make sure you smash the like button for youtube algorithm. So that a few more people can go and watch this video, if you like this type of content and interested in all things, personal finance and managing money make sure you subscribe to this channel. That is exactly what i talk about in every single video. Thank you.

So much for watching and i'll see you guys later you.

By Stock Chat

where the coffee is hot and so is the chat

33 thoughts on “How to build a kick ass investment portfolio in 2021”
  1. Avataaar/Circle Created with python_avatars SunLive662 says:

    How much do you suggest I invest? I currently invest about $200 a month in tech and ev stocks. Want a portfolio that’ll shine bright in 5 years

  2. Avataaar/Circle Created with python_avatars Nikki Baker says:

    Hi there, thanks for your content – I am a total newbie to this and want to get good at finances. I found your vid when looking into ethical pension schemes. I wonder where the ethics come into it, if investing in companies that are not necessarily doing good things for the planet. What are your thoughts on this? would welcome comments! thanks

  3. Avataaar/Circle Created with python_avatars tintuu says:

    First and second points sooooo great to be aware before I jump on to stock as a newbie thanks mate cheers so much

  4. Avataaar/Circle Created with python_avatars Laimia Deh Cobbinah says:

    Hi Sasha, I’m Laimia. I moved to the UK about a year ago and your channel has been very helpful. Can I kindly request for your email address. I would love you to guide me as I start investigating.
    Thank you.

  5. Avataaar/Circle Created with python_avatars MediaBrighton says:

    Great content. Is there an Index fund that has a collection of the Behemoths that you can recommend? Also what are your thoughts on Ballie Gifford funds like the Scottich morgage investment trust, the america fund, the pacific, positive change etc?

  6. Avataaar/Circle Created with python_avatars Adam Cunningham says:

    I've read that holding ETF's in the S&P 500 as a UK Investor is risky, as you're overexposed to US stocks, subjecting you to a lack of geographical diversification and currency conversion risks between the £/$ relationship – What are your thoughts on such statements?

  7. Avataaar/Circle Created with python_avatars Kevin Cowan says:

    Thanks Sasha, my biggest holding is Coca-Cola and hearing you refer to it as a ‘behemoth’ of a company and a leader in the food and beverage industry is great to hear.

  8. Avataaar/Circle Created with python_avatars Oneofakind says:

    "I have adviced the largest banks and financial services for many years"
    "I am not a financial advisor"
    😳

  9. Avataaar/Circle Created with python_avatars lennon890 says:

    Thank you for continuing to provide great content! Can I please make a video suggestion? 'Persimmon Vs Barratt Vs MJ Gleeson Vs Taylor Wimpey Vs Vistry Group'? I've seen so many people on YouTube, including comments on your channel, that say they want to add a UK house builder stock into their portfolio but don't know which to choose. Thank you!

  10. Avataaar/Circle Created with python_avatars Shah Zad says:

    TL;DR
    10% – Emergency Fund

    10% – Index ETF

    20% – Behemoths (industry leaders) [Google, Microsoft, Apple, Coca-cola]

    40% – High Growth^2 (established companies in growing industry) [Adobe, AMD, Nvidia, Pinterest, Slack, Square].

    20% – Growth Potential (Up and Coming) [pinterest, Smile Direct Club, Twilio]

  11. Avataaar/Circle Created with python_avatars AP257 says:

    Love this video, thanks for sharing this strategy. As a beginner it gives me a direction I can follow. I've looked at your video as a way to invest the £1k I've been putting away each month in a savings account but got confused with the bit about the family should target £40k. Is this an amount they should build up before investing or aim to have in savings and assets?

  12. Avataaar/Circle Created with python_avatars David Welburn says:

    Interesting you say that very few people can outperform the market, yet you only put 10% into your S&P 500 ETF, and with the rest of your money you are trying to outperform the market. Maybe you can do that with your level of expertise, but most people can't, so wouldn't a much larger stake into the ETF make more sense? Unless of course, you are publishing a list of your investments, for others to copy, and updating when any changes are made. Just a thought – maybe you could charge a little for it.

  13. Avataaar/Circle Created with python_avatars Pete Tomlin says:

    Great video thanks, for new investors like myself, I don't really feel able to select lots of different companies etc, do you think there's a role for sector/thematic etfs. For example, in the high growth/growth potential areas there's lots of thematic etfs. Also, do you think there's a place for bonds/commodities?

  14. Avataaar/Circle Created with python_avatars Tom Nicklin says:

    Great video. I am curious about the growth potential of Pinterest though that you mentioned. I don't see it filling any kind of gap in the market is all. Maybe prior to Instagram but now people are just following Instagram pages for their content rather than faffing about with making your own boards on Pinterest. That's my opinion anyway, would be good to hear the opposite though.

  15. Avataaar/Circle Created with python_avatars Terry Gomez says:

    fantastic video. Can you give more examples of behemoths and high growth companies? please

  16. Avataaar/Circle Created with python_avatars Just THINK says:

    Lovely diversity portfolio..
    I live in Scotland I love your vibes.
    Straight and to the point…

  17. Avataaar/Circle Created with python_avatars Sia Kay says:

    I love listening and watching your videos sasha. I think I am addicted to you☺️even if english is my barrir

  18. Avataaar/Circle Created with python_avatars Gary Ong says:

    Very informative with good tips for a startup investment portfolio. You should also consider setting up your portfolio within a stocks and shares ISA, (currently £20k per annum) to maximise your tax-free allowance/gains. Your index ETF is akin to a Tracker fund. Fir those with a mortgage, do you not consider increasing your regular monthly payments to shorten the life of the policy, just a thought as I cleared my 25 years policy in 17 years

  19. Avataaar/Circle Created with python_avatars Ed Davidson says:

    Thanks for this Sasha – very useful. I note you invest in the S&P 500 which undoubtedly has outperformed the majority of national index funds over the past 10 years or so. I just wondered what your thoughts were on the currency risk investing in the S&P 500 when you're best in the UK and USD is at a historically high level against GBP. Could a reversal in that trend have the potential to neutralise any gains?

  20. Avataaar/Circle Created with python_avatars Adam Randall says:

    Working my way through your videos in preparation to begin my own portfolio, just want to say thank you, I find your videos extremely helpful and looking forward to getting started!

  21. Avataaar/Circle Created with python_avatars okiesib says:

    So we’re does the stock&shares isa falls in if I am investing for example on vanguard life strategy fund 100%

  22. Avataaar/Circle Created with python_avatars Deepak Gupta says:

    Hi Sasha excellent video. Would you be able to provide help list the shares for last 3 categories so that we don't choose wrong stocks. Or would you mind sharing stocks in your portfolio with % split. We don't need the value just name of stock with % breakup

  23. Avataaar/Circle Created with python_avatars Matthew Broomfield says:

    Hi Sasha I'm a bit new to trading I'm looking to invest more of my savings as the bank interest is awful. Would you recommend trading 212 as a good place to use or what would you recommend?many thanks Matthew

  24. Avataaar/Circle Created with python_avatars Frost Jake says:

    I really Like the Idea on Emergency funds, I personally wouldn't hold more than 3 months of emergency funds and that third month would be a stretch. Great Video Man! keep up the great content 🙂

  25. Avataaar/Circle Created with python_avatars Lloyd Sandall says:

    Thanks Sascha, another great, simple and concise informative video. You manage to clearly simplify the topics you talk about.

  26. Avataaar/Circle Created with python_avatars Serah O. says:

    This is my third time watching this video today! I keep coming back to it because it is honestly the most constructive video on building a portfolio that I've come across.
    I am sincerely grateful to you for creating this video. When Trading 212 resumes onboarding new client, I will be sure to use your link. Thanks Sasha 🙏

  27. Avataaar/Circle Created with python_avatars kingh32 says:

    This is honestly some of the best content I've seen on investment portfolios and the like. Bravo.

  28. Avataaar/Circle Created with python_avatars Tomas Bersier says:

    Really interesting video mate, thanks for breaking down your strategy. You're making me reconsider leaving my entire emergency fund in Premium Bonds…

  29. Avataaar/Circle Created with python_avatars Artiom Grosu says:

    Amazing content, you will get a lot of subs with time. At this point you need a portfolio reveal video 😉

    Also, surprised you didn't mention Tesla, it will easily triple from today by 2025.

    For individual stocks, do you value them, do you have any price targets or this is not your domain?

  30. Avataaar/Circle Created with python_avatars Laura Jane says:

    What do you think of EV market and SPAC investments for the final 20% potential high growth part of investments?

  31. Avataaar/Circle Created with python_avatars lra says:

    Thanks for the really clear videos Sasha, nicely clear and concise! I am surprised at your 10% in Index funds if these are typically appreciated for long term investments. Would you not suggest this portfolio is rather aggressive and designed for an experienced investor? As opposed to most of your beginner audience, myself included. Cheers.

  32. Avataaar/Circle Created with python_avatars MutingSociety says:

    Thank you so much for this Sasha, I started watching you back when you posted your first videos on the UKPF reddit, it's been super inspirational to see how far you've come over the past year. I have a question of sorts:

    I feel at odds in my current financial situation and would really value some perspective. I'm nearly 30, have £5k in a LISA and in a £25k p/y job, en-route to a promotion and have options on the horizon to try and push for something around £30k in the coming year.

    I regret not saving in my 20s as I can see the impact now – but, the next best time to do something about it is now. My two main goals are to buy my first property (currently renting with a friend for cheaper than the average) and to set up a long term investment fund to act as a retirement fund, as I can't really get the benefit of maxing out my pension contributions in my work scheme due to how little it would leave with me.

    I'm at odds over whether to pool all available money/funds into my LISA as a deposit for my first property (this will take 3 years to do) OR whether to split what I can save across my LISA and an investment fund which will increase how long it takes for me to get a reasonable deposit. Saving for a property has been harder and harder because even saving a 10% deposit is tricky when the goal posts are constantly shifting in terms of increasing housing prices. At present – being realistic, I can probably put aside about £3-4k per year in savings.

    I recognise that given that I don't have much in terms of assets presently, my best option is to increase what I earn in the immediate, but other than that, I'm honestly stuck in terms of what to prioritise because I fear that by not investing, I'm missing out on years of potential contributions that could hinder that amount I look to have by retirement age.

    I appreciate your usual disclaimer re. financial advice etc and would happily pay for any input as I appreciate your time is precious, but I'd really value any input because I'm honestly scared of the ramifications of making the wrong decision now and potentially screwing myself in the long-term. Thank you.

  33. Avataaar/Circle Created with python_avatars Aaron Savvy says:

    Hey Sasha. Your 3 monthly porfolio updates and why you have invested in the companies (or changed/sold your shares) are immensely helpful. I really wish you keep doing those. Sharing your portfolio update vids with my friends

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