@Noor
Good point. If I were in my 20’s, I wouldn’t go for zero risk. Low-risk investments are safer but don’t give you the growth potential of higher-risk ones in the long run.
More laws, fewer flaws!
Taran said:
More laws, fewer flaws!
Could you explain that more?
You’re taking on more risk than you realize. Inflation could eat away at your savings if you’re keeping cash. A younger person should focus on S&P index ETFs. Just invest regularly and forget about it. Gold and crypto might seem tempting, but 90% should go into S&P ETFs for the long haul.
@Logan
I was thinking about using gold as a backup to buy more S&P 500 if there’s a market dip. Do you think that’s a bad idea, or does it sound like good planning?
Niko said:
@Logan
I was thinking about using gold as a backup to buy more S&P 500 if there’s a market dip. Do you think that’s a bad idea, or does it sound like good planning?
You’re overthinking it. Timing the market is really hard, and it’s nearly impossible to know when to buy or sell. Just keep adding to your investments, and you’ll be amazed at how much it grows over time.
@Logan
It’s not so much about timing; it’s more about recognizing a downturn. If my gold holdings drop enough compared to my S&P holdings, wouldn’t it make sense to use that gold to buy in at a market low? My concern is whether compound interest would suffer if the market doesn’t dip enough for that strategy to pay off in the long term.
Keep it simple: VOO, VTI, QQQ, and BRKB. Split them equally—25% each. Add money every two weeks to whatever has dropped in value. Do that for 10 years, then reassess your risk strategy.
Kai said:
Keep it simple: VOO, VTI, QQQ, and BRKB. Split them equally—25% each. Add money every two weeks to whatever has dropped in value. Do that for 10 years, then reassess your risk strategy.
Don’t you think having a little gold as an inflation hedge would be a good idea for buying during market dips? For example, I’d put $90k in the market and $10k in gold. If the market drops to $75k, I could use the $10k in gold to buy more at a low point. Would that compromise the potential for compound interest?
@Niko
If you want to use 10-15% of your portfolio for something other than low-cost index funds, that’s fine. But I don’t see why you’d choose gold. I don’t own any gold myself, just a small amount of Bitcoin and some individual stocks. The majority of my portfolio is in low-cost index funds.
The problem is that you’re probably buying everything at a high price (S&P, gold, crypto). You should look for things that others aren’t paying attention to, like markets in Mexico, France, or pharmaceutical stocks.
You clearly don’t understand what ‘zero tolerance for risk’ means. HYSA, CDs, and government bonds are the closest to zero risk. Investments, by their nature, carry some risk. Even low-risk options like S&P 500 have risk. That’s something you’ll need to live with to make money in the market.
@Zeke
I meant ‘zero risk’ in the sense of safe money that’s set aside. I want to avoid losing money from market drops. You’re right about the S&P 500—it’s not 100% safe, but it’s safer in the long run than trying to guess where gold or crypto will go next.