A financially independent investor explains the 'barbell' strategy that allows her to take big bets in a low-risk way

• Sherry Jiang, 32, started investing in her early 20s after graduating from UC Berkeley.
• She initially put her money in ETFs and then started buying individual stocks.
• Now, she uses a barbell strategy and balances low-risk ETFs with high-risk investments like crypto.

Sherry Jiang has always been fascinated by how markets work.

"It's very intellectually interesting to me because it allows you to take a view of the future — take some kind of bet against it," the Singapore-based investor told Business Insider. "But it's not just like, 'Oh I think this is going to happen.' It's, to what degree do you think it's going to happen? You truly are putting your money where your mouth is."

Enough of her bets have paid off, and, at 32, Jiang has a seven-figure net worth and considers herself financially independent. BI verified her net worth by looking at screenshots of her various investment accounts.

Her success with the markets ultimately allowed her to walk away from the corporate world and try her hand at entrepreneurship.

Jiang, who runs a personal finance platform called Peek, started her career at Amazon in 2014. She joined Google in 2015, which brought her to Singapore from San Francisco, and worked for the tech giant until 2021, at which point she felt comfortable walking away from a steady paycheck to work for herself.

"I wanted to do something different and take a risk. After some thought, I was like, I think this is one of the best times to take that leap: I was 29, I had enough savings where I could sustain myself, I wasn't at a point where I had dependents or kids," said Jiang. Plus, it was early Covid when there were strict stay-at-home requirements. She figured, "this is the best time to be heads-down, go all-in, and try the entrepreneurship journey."

From ETF investing to the 'barbell' strategy

Jiang, who studied finance at UC Berkeley and spent a summer interning as an investment banker at Goldman Sachs, followed the markets as a student but didn't start investing her own money until after graduation.

"The thing that I had to learn was the behavioral part — or the habit part," she said. "It's not just enough to follow the markets and know what's interesting. It's more important to think, 'Hey I just got my paycheck this month.' Or, 'I just got my bonus this month. I need to invest that right away,' and never leave money on the table."

Her first investment was simple: "I just put it in ETFs initially. I put it in stuff like VUG."

While she now considers ETFs a low-risk investment, it was daunting at the time.

"When you're young, putting $10,000, $20,000 into stuff initially just feels scary, even though intellectually you know you should invest," she said. "As I got more comfortable, I started taking more bets in the market."

She started buying tech stocks.

"Apart from the typical Apple, Amazon, and I got RSUs from Google, I was very lucky to invest in Tesla pretty early on," she said. "I invested in Tesla back in 2015 — this was before a few stock splits — and my investments have grown basically 10x since."

Over the last decade, she's developed a more complex strategy that she says has allowed her to capitalize on asymmetric returns in what she considers a fairly low-risk manner.

It's called the barbell strategy.

"The idea of a barbell strategy is basically you invest only on the extreme ends," she said, meaning low-risk and high-risk investments — and skip any choices in between.

"Low-risk" and "high-risk" may mean different things to different investors, she noted: "Some people think very low-risk is T-bills; I think ETFs are low-risk from a long-term perspective. I'm not touching this capital for a long time and I don't think the US equities market is going to go to zero by the time I retire, so that's why I call it low-risk."

As for the other extreme, Jiang would consider her 2015 investment in Tesla or her current investments in crypto high-risk.

It's up to the investor to choose how much of their portfolio they want in safer, stable investments versus more speculative investments.

"Some ways that people construct a barbell strategy is following the 80-20 rule: 80% stable, 20% risky," she said. "I'm more of a 65-35. I do have more risk in my portfolio. Others do 90-10, so it's up to you to decide how you want to construct it."

When figuring out how much risk you're willing to tolerate, think about how your portfolio would be affected if your big bets didn't work out.

For Jiang, she feels that if her high-risk investments went to zero, "I will be totally fine," she said. "And if it goes 10x, it's actually a significant amount that could contribute to the portfolio."