(20 m) I just made six figures from some crypto plays and have been looking into index funds. The market seems to be pumping, and I see that FXAIX is up by 36% already. So, I’m wondering if it’s a bad idea to put in 75k now – am I buying at the top? I’m new to stocks, just starting to get my feet wet. Also, I plan to buy a rental property in 6-12 months. Would putting money into the S&P 500 be smart, given that it’s usually a long-term investment? I’m not sure if there’s a better option. I’ll be talking to a financial advisor soon, but I’d love to hear your thoughts here on the forum.
If you need the money in 6-12 months, don’t put it in stocks. A high-yield savings account is safer for that. The S&P 500 is usually near all-time highs, so you’re unlikely to time the market well if you wait for a dip.
If you might need the money soon, put it in a high-yield savings account or a money market account. Definitely not in stocks!
Try VT if you’re thinking long term. It gives you global exposure, not just the U.S.
Just invest it, then forget about it. Remove any links to your brokerage account from your browser, unsubscribe from all investing-related posts, and turn off market notifications. In 40 years, it won’t matter whether you bought at the top or bottom.
The fact that the S&P 500 is almost always at an all-time high is a sign it’s a strong investment. Sure, it could drop by 20% next month, but if you don’t have insider information, it’s still a good idea to put your money in and let it grow.
@Lennon
You’re giving away your age without realizing it.
Micah said:
@Lennon
You’re giving away your age without realizing it.
The original poster (OP) is 20 years old, just saying.
Micah said:
@Lennon
You’re giving away your age without realizing it.
The original poster (OP) is 20 years old, just saying.
I’m talking about you, not the OP.
@Micah
You don’t know my age or my portfolio. I was giving advice based on what the OP shared, who is 20.
Lennon said:
@Micah
You don’t know my age or my portfolio. I was giving advice based on what the OP shared, who is 20.
If you’re at least 40, you’d know the S&P doesn’t always hit an all-time high. I’m not saying you’re wrong, but I’ve lost 12 years of potential growth due to things like the 2008 crash. I don’t recommend putting everything in the S&P, especially for someone who’s starting out.
@Micah
If you had invested before those crashes and stayed in the market, you’d be doing much better now. That crash affected everyone. If you don’t have insider info on a future crash, telling a 20-year-old to invest in bonds is just bad advice.
@Lennon
I never said to invest in bonds. Go through my comments – I actually suggest mostly SCHG for young people. I don’t invest in bonds. But until you’ve built a portfolio that includes satellite investments like QLD, TQQQ, and UPRO, I’m not going to take your opinion seriously. I’m focused on outperforming SPY, and that includes using a DRIP dividend strategy.
@Micah
You should probably keep the focus on building a well-diversified portfolio that suits your long-term goals. I agree that a solid plan is key, and it’s great to see different strategies being shared here.
I get where you’re coming from. The S&P 500 can be volatile in the short term, but if you’re investing for the long haul, it’s still one of the better choices out there. Just remember to balance it out with other investments if you’re looking for more security.
If your investment horizon is less than a year, the S&P 500 may be riskier. Consider using more conservative options like money market funds or high-yield savings for short-term needs. The S&P 500 is more suited for long-term investing, but Dollar-Cost Averaging (DCA) can help reduce risks if you’re worried about buying at the top. Given your crypto investments, it might be wise to balance it with other assets like S&P 500 funds, real estate, or other solid choices.
@Valen
Thanks, this is helpful. I plan to put most of this money towards a rental property, but I’ll take your advice. I’ll invest a little in the S&P to build it up for the long term and probably put about 80% of it in a high-yield savings account for now. Appreciate it!
Keep in mind, the S&P 500 is a long-term play. In 2022, it lost -18.1%. It’s a buy-and-forget kind of index, and many experts say you need to hold it for at least 25 years to avoid major losses. If you’re planning to cash out soon, the S&P may not be the best option. You might want to look into high-yield money market accounts instead.