Klevah™

Overview

In this strategy, the most crucial step is to make a start as soon as possible to begin learning about shares and be ready for future opportunities. For larger amounts, this may entail spreading out the initially available investment capital into multiple purchases over a year or more. This counters the risk of unfortunately investing all at once just before a crash. Subsequently, making regular investments smooths out the prices that the shares are bought for. This example aims to achieve the high returns available in diversified shares in the simplest, lowest fee, lowest risk way. A straightforward plan could be to buy a 50/50 combination of firstly the Vanguard Australian Shares Index ETF (VAS) and secondly the Betashares Nasdaq 100 Currency Hedged ETF (HNDQ). The second of these is a US Technology focused fund.
Read about these types of investments called ETFs - Click here.

Further investments could also be split 50/50. If one grows faster than the other it does not matter and there is no need to even them up. Buy and hold the shares for as long as possible, only selling them down when nearing a house purchase/reno. Only buy a parcel of shares where there is an intention not to sell shares for at least 3 years. This gives enough time for good gains from those investments to be highly likely before they may need to be sold.

Beware of Capital Gains Tax when planning to sell. Dividends and distributions that pay money into your bank account will have Income Tax and possibly Capital Gains Tax implications. These grow according to the size of the share holdings. It may help to automatically divert salary into a shares savings account to keep up consistent investing. Simple strategies can be the most effective.

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Don’t Panic!

The biggest risk is not a market fall or crash occurring but selling during one. It is vital to never be in a position where shares must be sold at a specific point in time. Any time when shares must be sold runs the risk of share prices being low.

If a need to sell shares is approaching, then sell ahead of time to avoid any unfortunately timed fall in the market. Outside of a crash selling shares is an option but finding funds from elsewhere is better for overall returns. Never selling shares is what the super-rich do. They teach their kids to do the same. That is why they are so wealthy. They just enjoy the passive income and do not pay much Capital Gains Tax due to holding on to their shares. Never panic sell.

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The Chosen Few

This example strategy involves investing in a well-diversified combination of 2-3 Exchange Trade Funds (ETFs) that has a track record of high returns. The first fund to invest in is an Australian Index ETF that covers the Australian market. More info about these types of investments called ETFs - Click Here This is called Vanguard Australian Shares Index ETF (VAS) - Click here and has the ASX code VAS. Go to Aussie Shares Click Here

The second fund to use is a US Technology ETF covering 100 US companies that are mostly regarded as tech companies on the NASDAQ 100 Exchange. This is called Betashares Nasdaq 100 Currency Hedged ETF – Click Here and has the ASX code: HNDQ. It is currency hedged to remove the effects of changes in currency on the value of the shares in $AUS.

Another fund to potentially invest in is an ETF that targets the world's largest companies that are listed in the USA. This is called Global X FANG+ (Currency Hedged) ETF – Click Here and has the ASX code: FHNG. It is also currency hedged. It rises and falls the most in price but has had the best returns overall by a long way of recent times.

ETF shares do not need to be bought directly from the company that manages the fund. They aggressively market their platforms on their sites. You can choose your preferred share trading platform to buy your shares. To read about share trading platforms - Click here

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Why These?

These funds spread investment dollars far and wide but only within the highest performing areas. The Australian fund brings the historically good performance of the Australian share market through ownership of its top 300 companies. It also provides Franking Credits along with its payouts to shareholders. These tax credits are beneficial to Australian taxpayers.

The US technology fund provides ownership of the best performing sector of world share markets in recent decades through 100 US listed companies. This is an efficient way to hold some of 400 different companies in just two purchases and holdings.

There are other share trading, ownership, admin and tax details to consider.
Click here to read about share trading platforms.

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Market Timing

It is often said that in the share market you should buy low and sell high. In the famous words of Warren Buffett, “Be fearful when others are greedy, and greedy when others are fearful.” Doing this successfully is very difficult. How low should the market fall before buying how much? When has the market risen far enough to sell? It is likely to be a far better strategy to avoid making calls about where the market is going and instead invest what is available for the long term. In theory, having more money invested more of the time generates more performance. In the strategy that aims to get the timing right, the time that the investment money is left out of the market likely costs more than the benefit of buying or selling at a good time. Knowing where market tops or bottoms are is impossible without the benefit of hindsight.

It is also impossible to avoid market timing altogether. A new foray into shares must happen at some point in time. In theory the best ‘expected result’ comes from putting in all of the available money right away. For larger investments there is too much risk that there will be an unfortunately timed crash right after the shares were purchased. This is a problem psychologically more than financially as it can cause people to quit investing altogether. A good strategy needs to minimise the chances of panic and quitting. On the other hand, waiting for the perfect time to make an investment risks never getting around to making one at all.

The strategy example here takes the plan of being fully invested from the beginning as a starting point. From there it is adjusted with the initial investment split up into a few parcels. Their investment is split across a year, or more, depending on its size. Further investments can be made after that, regularly or as funds become available. The spread out payments average out the cost of the shares and protect against a poorly timed market fall. How much to split up and spread out the initial investment? Enough to create the confidence to see the strategy through. The strategy here is not to time the market but to invest as much as can reasonably done without risk of selling or giving up due to disappointment.

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The Target

Whatever your financial goals, sensible share investments can hit the target. Possible personal objectives include saving for a better house faster, retiring early, taking financial pressure off, or just building wealth. Shares can get you there more quickly, whatever the goal, with sensible investments and enough time. Calculate the possible ways to reach those financial goals using AI specifically as a calculator. Link to portfolios with AI - Click Here

There are other objectives that shares are used for. Farmers use shares to put away money from the good times that can help them through the bad. The profits and losses of farming can swing wildly. The income from shares can give them something to live on in tough years and shares can be sold in the really bad years to keep the farm going. Farmers who do this can gain a big enough portfolio that it overtakes their farm in how much it supports them. It can buy them expensive inner city properties if they wish to retire there, or their kids want to move there.

Charities, scholarships and endowments typically invest in shares. They need the funds to continue their operations indefinitely. They make long-term investments and use the income to fund their objectives. Superfunds invest in shares to provide the largest possible retirement savings for their members. The Australian Future Fund also uses shares as the best vehicle to increase the nation’s wealth over time. It began with $60.5 billion in 2006 and, as of late 2025, had about $260 billion (without further contributions).

Shares are used by these institutions and people for a reason. They provide great returns and their risk becomes tolerable over longer periods provided the investments have been chosen sensibly. Why not emulate them? Shares can also be a fun hobby as long as sensible plans are made and adhered to. They can motivate investors to take a greater interest in history, economics, finance and politics as examples of things that influence share prices.

Making initial share investments as early as possible speeds things up significantly. Holding shares naturally increases the pace at which someone learns about them. Understanding the possibilities can lead to greater investments and confidence. Learning the lessons of wild stock market moves and uncertainty is best done as early as possible before very significant investments are made.

These lessons are hard to learn on the sidelines. Future financial opportunities in the share market or in a person’s life can be taken with this experience. Making a very small investment just to get going is great. Making larger purchases is better. That is, until a level is reached where panic selling could happen in a market crash. This must be avoided. It is important to only invest what is not going to be needed for years. Making a sensible start could be life changing.

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Hang on!

A buy and hold strategy is where shares are bought with no intention to sell them for a very long time. It aims to benefit from the successful performance of the companies that have been invested in. Other strategies involve trading in and out of stocks to get the best prices. Decisions are based on the fluctuating short-term perceptions of the future prospects of companies. That risks getting poor prices on the uncertain markets and costing extra transaction fees.

Buy and hold is the strategy here for many reasons. In the short term, share prices can swing wildly but holding for at least 3 years makes it likely enough that they will make gains. It is also uncomplicated and easy to remember and follow. It does not require someone to watch their portfolio carefully if they do not wish to. It delays paying Capital Gains Tax and can be rewarded with increasing Dividend and Distribution payments over time for passive income.

The more a strategy involves reacting to what the market is doing, or guessing what it will do next, the more likely it is that returns are lost by bad decisions. Financial professionals are themselves at high risk of making mistakes with even the simplest additions to the basic strategy.

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Housing Restarts

Buying or renovating houses will interrupt a well followed buy and hold plan. It makes sense to sell some or all of a share portfolio to fund these large expenses. Consider Capital Tax on shares sold beforehand. Building a share portfolio can restart where it left off once mortgage payments are under control.

It is prudent to make any sales of shares that will be needed to fund housing costs well beforehand to avoid a market fall at the worst time. Selling down shares and putting the money into property conserves gains in the form of home equity. Repeating this process makes for living life in better houses. Leaving more money in shares more often will lead to greater wealth down the road, however.

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“Never Lose Money”

If you own an individual company it could go bust or perform poorly and never give you good returns. A fund that follows the whole S&P/ASX 200 Australian, or S&P 500 US, Index will be able to bounce back from any losses far more reliably for example.

Losses will be locked in if there is a time when shares need to be sold for some reason when they are down. This possibility needs to be guarded against to maintain the strategy. Some defences are: 1. An adequate emergency fund. 2. Saving up cash for things well in advance. 3. Selling shares well before the funds are needed unless in the middle of a crash already (always accounting for Capital Gains Tax). 4. Using alternatives that are less costly than selling low priced shares such as removing funds from a mortgage offset account. 5. Not buying shares in the first place unless they are likely to be held for 3 years or more.

The simplest thing is to buy and hold and forget about selling the stocks unless they really must be sold. Losing money in the share market is easy but making money is more likely if enough time is combined with sensible investments. This is how to follow Warren Buffet’s advice to “Never lose money” using Exchange Traded Funds.

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