What is “Core Satellite” Investing?

I have two special guests in todays episode – Dean Anderson CEO, and co-founder of online investment platform Kernel, and Catherine Emerson, also with Kernel who is a former financial adviser.

If you’ve already started your investing journey, or you’re about to, you may want to consider the following:

  • How much risk do you want to take?
  • How much energy and focus do you want to put into this endeavour?
  • Are you passionate about investing?
  • What are some of the events (that you know about) on your own horizon?
  • Why are you event investing – who or what, are you accountable to?

A Core-Satellite approach to investing isn’t yet another thing you have to choose to embrace or not – it’s simply a methodology financial adviser use (and you can too!) to construct an investment portfolio.

What’s an investment portfolio? It’s just a way of describing a bunch of investments you may hold across some different classes – cash, fixed interest, property,and shares being the main ones).

What’s the intent of Core-Satellite?

Minimize costs.

Maximize tax efficiencies

Reduce volatility (or big changes in price relative to the average)

Outperform the broader stock market.

You’ve heard on the show previously that unless you have an edge, you’ll get the average – well, the Core-Satellite approach allows there to be an edge, yet still ensures you are eligible for the lions share of the average too.

Essential reading for this episode:

How does an index fund work? (We discussed how index funds could form part of your ‘Core’)

How to pick stocks? (We discussed how direct share ownership could form part of your ‘Satellites’)


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