Your retirement portfolio is a collection of investments you save to prepare for when you stop working. When you retire, your retirement portfolio will be what gives you income.
What is a portfolio?
The term "portfolio" refers to a collection of assets that includes things like stocks, bonds, cash, and other types of investments.
How do I construct my portfolio?
When you contribute money to retirement accounts, you can choose how you want that money invested. The main factors that you can use to guide your choices are your age, interests, and risk tolerance.
It’s important to maximize your return within whatever level of risk you’re comfortable with. That’s why Catch generally invests in ETFs (Exchange Traded Funds), which are bundles of a number of assets that generally decrease risk and increase diversification, rather than expensive mutual funds or individual stocks (which are more risky).
For more on how to construct your portfolio, see the guide.
What is passive investing?
Passive investing is a strategy that involves building a diversified portfolio of low-cost investments like Exchange Traded Funds (ETFs). It offers several benefits over active investing, including:
Lower cost: a mutual fund or active manager may seem to have small fees, but those fees can add up to very large amounts of money over many years.
Greater tax efficiency: passive investing doesn't involve a ton of active buying and selling, so they don't incur as much capital gains taxes as a more active approach.
Less time commitment: active management can involve ongoing research and analysis, especially if you’re trying to do it yourself, which passive investing does not require.
What are Exchange Traded Funds (ETFS)?
Exchange Traded Funds (ETFs) are a type of investment that hold many assets, rather than just one. Instead of buying, say, 500 different individual stocks, you can invest in a single ETF that bundles those 500 stocks into one.
ETFs can minimize risk without sacrificing return. Investing in an ETF that tracks the 500 or so stocks in the S&P 500 means that your portfolio will seek to capture the average return of the broad market.
In other words, ETFs are passively managed. They simply track the prices of whatever is inside of them, rather than being actively managed by a someone like a fund manager.
For more on the theory and benefits of passive investing, see the guide.
What is ESG?
"Social Good" portfolios use a process known as Environmental, Social, and Governance (ESG) analysis. ESG analysis applies an additional process of looking at investments based on their environmental, social, and governance characteristics.
Companies that aim to have a positive impact on the environment and/or society and who have diverse leadership are included. The filter criteria is built using the standards of U.N. global compact principles as well as additional filters built by Vanguard and iShares. You can ask an investment professional if investing in ESG is right for you.
Is Catch a Registered Investment Advisor?
Yes. Registered investment advisors (RIAs) are professionals who provide investment advice and manages assets on behalf of others. RIAs have a fiduciary duty to act in the best interests of their clients.
This means that they are legally required to act in your best interests. RIAs cannot recommend investments that aren’t appropriate for your financial situation. RIAs are also regulated by the Securities and Exchange Commission (SEC) or the state securities regulator where they are located. To learn more about RIAs, see the guide.