Building your first portfolio
You don't need to be rich or an expert. A simple 1–3 fund portfolio is what many pros use themselves.
Asset allocation
Asset allocation is your mix of stocks vs. bonds. Young investors with decades ahead often hold mostly stocks (like 90/10) because they have time to recover from drops.
As you get closer to needing the money, you shift toward more bonds.
Accounts for teens
Under 18, you need an adult. A custodial account is managed by a parent for you. If you have earned income (a job), a custodial Roth IRA lets your money grow tax-free for retirement.
Rebalancing
Once a year, check if your mix drifted (say stocks grew to 95%). Rebalancing means nudging it back to your target.
Real example
Leo's starter portfolio
Leo, 17, earns $3,000 a year mowing lawns. With his mom's help, he opens a custodial Roth IRA and invests $1,000.
- US total market fund
- 60% · $600
- International fund
- 30% · $300
- Bond fund
- 10% · $100
- Time spent per year
- ≈ 15 minutes
Remember this
- Allocation = your mix of stocks and bonds.
- Teens need a custodial account; a Roth IRA needs earned income.
- Rebalance once a year to stay on target.
Quick quiz
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