One warm and sunny afternoon, Steady the turtle and his best friend Zippy the rabbit were playing in Steady’s backyard.
In the garden, Steady’s mom was tending to her flower bed. Pink, orange, and blue blossoms were blooming in full color.
“Hi there, ma’am! The flowers look beautiful!”
Zippy greeted her cheerfully. Steady’s mom turned around with a warm smile, holding a small shovel.
“Hello, Zippy! I’m just doing a bit of gardening. I’m planting seasonal flowers around this big tree.”
“Wow, this tree looks so strong!” said Zippy, gazing up.
“It sure is. This tree brings calm to the whole garden. You know,” she added, “this kind of idea also exists in the world of investing.”
“Huh? Gardening and investing are similar?”
Zippy tilted his head in curiosity.
She smiled gently. “In some ways, yes. There’s an investment approach called the Core-Satellite Strategy, and it’s quite similar to gardening.”
🌳 What Is the Core?
Steady’s mom pointed to the base of the large tree.
“Look at this big tree—this is the core. It stands strong no matter the wind or rain, right? In investing, the core is like a globally diversified index fund, such as an All-Country Index, that you invest in steadily every month.”
“Ohh… That sounds just like the one I’ve been contributing to each month!”
Steady nodded proudly.
🌼 What Is the Satellite?
Next, Steady’s mom pointed to the flower bed.
“This area is the satellite. It’s colorful and changes with the seasons, doesn’t it?”
“It really does!” said Zippy.
“Satellites are the more adventurous part of your portfolio. They add variety and excitement, while maintaining overall balance. These could be thematic ETFs or individual stocks. It’s best to keep them around 10–30% of your total investments.”
🌱 Are Individual Stocks a Learning Opportunity?
Steady asked curiously,
“My older brother invests in a lot of individual stocks. Are those considered satellites too?”
“Individual stocks can be quite volatile, so you need to study a lot. But because of that, you can also learn so much—from how companies work to how the economy moves. It’s a great learning experience, but it’s a bit different from the Core-Satellite Strategy. Your brother carefully selects a few individual stocks and holds them in a balanced way to spread the risk.”
“Wow, my brother is amazing,” Steady said, impressed.
🍀 Balance Is Key—in Both Investing and Gardening
Putting down her shovel, Steady’s mom looked kindly at the two children.
“Because this big tree has deep, strong roots, the flowers around it can grow freely and beautifully. Investing is the same. When your core investment is stable, you can take on new challenges in your satellites.”
“I think I’m starting to get it!”
Steady and Zippy both smiled brightly.
✅ Today’s Key Takeaways
- The Core is your stable foundation: Globally diversified index funds you can hold for the long term.
- The Satellite adds excitement and opportunity: Thematic ETFs and individual stocks for targeted growth.
- Balance matters! Build a solid base with the core and expand possibilities with the satellite.
🧠 Quick Quiz!
- What type of investment is commonly used in the core part of a portfolio?
A. Individual stocks
B. Global index funds
C. Cryptocurrency - What’s a key characteristic of the satellite portion?
A. Very stable and unchanging
B. A short-term gamble
C. Higher risk, but with growth potential - Why is it good to combine both core and satellite investments?
A. The core provides stability, and the satellite offers growth opportunities
B. It’s more fun to buy lots of different products
C. Because your friends are doing it too
🎯 Answers:
- B
- C
- A
🌸 Stay Tuned for More Adventures!
With each step, Steady and Zippy are growing their financial literacy—and so are you! 🐢🐇✨
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