‘I’m 20 With $40K And Ready To Risk It All’ – Reddit Explodes Over Best Long-Term Stocks And ETF Strategies
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Exchange-traded funds (ETFs) and long-term stocks are two important pillars for building a strong investment portfolio, especially since they have the potential for constant growth. For a 20-year-old with $35K to $40K to invest and a risk appetite, the challenge is deciding which way to go so the investment pays off.
With this concern in mind, the young investor took to Reddit, a discussion board with over 2.6 million members, more precisely to an investment-specific community, r/investing, of new and seasoned investors in stocks, ETFs, and more.
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Because he won’t need the money for five to 10 years down the road, the 20-year-old is particularly looking for long-term investment solutions and is also willing to risk the money if he is certain that it will prove rewarding.
Let’s analyze what the Redditors have suggested the young investor do.
Long-Term Stocks or ETFs? Redditors’ Advice
Recommendations For ETFs
Many commenters suggested the 20-year-old invest in ETFs because of their simplicity, diversification, and lower risk. Most Redditors named the ETFs they thought were best for the investor to buy, such as VTI, VOO, and VT.
“First thing, you should do is stay clear of subs like TheRaceTo10Million and stick to ETFs only. You don’t have the knowledge or experience to invest in anything else. Do it right, learn personal finance, stick with index funds,” the first comment reads.
While this Redditor hasn’t mentioned any particular ETFs, many others have.
“VOO and call it a day. Keep adding every payday till you retire,” says a board member.
“Put it in the S&P500 in a low-cost ETF like VTI or many others and never touch it,” another comment says.
A third member of the r/investing community also recommended a couple of ETFs and added that, in his opinion, the amount of money the 20-year-old has is too insignificant for the concern he is showing.
“VTI and chill. If you’re worried about losses, then maybe VT and one total market bond fund. But with that amount of money, I’m not sure it’s worth overthinking it,” he wrote.
A smaller but still notable group of Redditors from the community have advised the young investor to focus on individual stocks or a mix of stocks and ETFs.
“You’re going to hear a lot of VTI and VOO and SCHD. That stuff is all great but it’s very slow money. Compared to individual stocks and being more risky with leverage ETFs like NVDL or TSLA,” one commenter says.
Riding on the risk factor the 20-year-old has mentioned in his inquiry, this one Reddit member suggested he start with individual stocks and eventually buy low-risk ETFs.
“You get the chance to take risks while young, then it’s gone. I would go with individual stocks, then crypto. When you accumulate enough wealth, diversify the investment to lower risk asset ETF, even real estate,” he wrote.
A second risk-taker advised the poster to split the money and invest it in different acquisitions.
“If you’re young and comfortable with risk, I would say 60% index funds, 20% individual stocks, and 20% crypto. Maybe take 5% out of somewhere for gambles and higher risk investments if that interests you,” the Redditor said.