Portfolio
How to Build Your First Portfolio: Core and Satellites
Key takeaways
- "Core and satellite" approach: 60–80% in a broad, low-cost base; 20–40% in thematic bets.
- The core typically consists of the S&P 500 or a global index.
- Satellites: NASDAQ, semiconductors, AI, space, healthcare or dividends.
- Higher expected return means higher risk and volatility.
- Rebalance back to target weights once a year — you naturally sell high and buy low.
Beginners often think that investing means picking individual stocks. The reality is more boring — and more effective: a handful of well-chosen ETFs and a clear structure is all you need. The most widely used approach is "core and satellite".
Core (60–80% of the portfolio)
A broad, low-cost and globally diversified foundation that makes up most of the portfolio and requires no attention. Typically an S&P 500 (CSPX) or a global index. It is diversified, cheap and has historically grown reliably. You are not looking for excitement here — you are looking for peace of mind and compound growth.
Satellites (20–40%)
Smaller positions that "spice up" the portfolio according to what you believe in. From the ETF overview, for example:
- NASDAQ 100 / semiconductors (CNDX, SMH) — higher growth, higher volatility
- AI and big data (XAIX) — a bet on a technological trend
- Space (JEDI) — a more speculative theme with a long horizon
- Healthcare (XDWH) — defensive sector with milder drawdowns
- Dividends (VHYL, ZPRG) — if you also want regular income
Do not forget rebalancing
Once a year, check whether satellites have grown too large (after a good year they can easily expand from 10% to 18%), and bring the weights back. You are thereby selling high and buying low — automatically and without emotion.
Specific model portfolios (from "Maximum Growth" to "Dividend Income") and their projections can be found in the growth calculator.
FAQ
How many ETFs do I need?
Anywhere from 1 to 4 is fine. More funds do not automatically mean better diversification — one broad index already covers hundreds to thousands of companies.
What is rebalancing?
Returning to target weights: selling part of an oversized position and buying more of the lagging one. It keeps portfolio risk under control.
Do I have to pick individual stocks?
No. Index ETFs hold an entire basket of companies at once, so there is no need to bet on individual names.