I am in my early 20s, and I am curious in how you handled your investments through volatility to obtain a strong return. While it’s common advice to follow market trends, I think it’s better to start investing in the correct locations first and manage risk on underperforming investments. Are there really no investments that grow consistently? If someone could share their experience with economic cycles, it would be very appreciated.
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Volatility is the cost of achieving long-term growth.
If you are looking for consistent growth, you’ll likely have to settle for lower returns, which may not even outpace inflation.
It all comes down to supply and demand.
Invest your money wisely and then leave it in those investments for many years. Occasionally rebalance your portfolio. Consider buying and holding total-market index-based, low-cost stock and bond funds, tailored to your risk tolerance, capacity, and willingness to take risks.
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Is that a passage from Money Psychology? Excellent quote. It is accurate, too. You should have a long-term plan and disregard fluctuation. Overemphasizing short-term profits will prevent you from achieving your long-term objectives. Stock selection is also challenging, concentrate on etf and include a few high-quality stocks that you are familiar with due to your expertise or area of interest. That’s my recommendation, but you do you, OP.
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I diversify in order to handle it. The broad indexes performed well during the most recent downturn, recovering swiftly. Bonds and a mix of large, mid, and small cap indices are what I like to own. Even though it “limits growth,” there is merit to eschewing the fomo in concentrated AI and fashionable positions. Loss limitation is also necessary.
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2000 and 2008. it’s a very broad question. There are investments that offer consistent growth, but they tend to be much slower than more volatile options. My only advice is to recognize that this too shall pass and to keep pushing forward.
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You could allocate the stable portion to ETFs like SPY or VOO, or US Treasury bonds, while dedicating around 10% to assets like bonds or gold to act as a reasonable hedge against risk.
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Which exchange platform do you use? Would you divide up the various investments across several brokerages in order to improve management?
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I use Moomoo for trading most US ETFs and gold ETFs, and I also hold some exchange portions on IBKR.
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VTI and chill. The younger you are, the more you benefit from compounding. There will also be many times in your life when you need to access some cash, and you can’t do that if you are consistently making high-risk bets instead of allowing compounding to do its job.
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The day the DOW broke 10k for the first time, I was home from school and my dad was at work when I called him. Disregard the near term. See where we have come from now.