Put all your eggs in one basket with investing?

[The motor guy]

They always say to diversify for safety of your portfolio and to also expose it to more possible gains, but imo looking at the history of stocks and etfs etc. Most all of them have quadrupled at one point or another. You could turn 250k into 1 million or more pretty quickly imo.

Opinions?

 

[Eddie]

At 86 years old, I decided to diversify when I got into the market ~ 30 years ago. I suffered very little when the market went down-down.

 

[The motor guy]

At 86 years old, I decided to diversify when I got into the market ~ 30 years ago. I suffered very little when the market went down-down.

Imo that's when you make a lot of your money assuming you ride it out and don't sell anything, because it comes back stronger.

 

[supton]

Opinions? not sure where to start. Are you taking into account time in market as opposed to timing the market?

All my money is in a couple of index funds. Not sure on the difference between mutual fund vs ETF, but with an index that owns a bit of all the big players, there is a level of diversification. One stock has a bad day, the fund doesn’t. The market has a bad day, ok the fund does too, but that’s true for everyone.

I also have a target date fund that will naturally lower its risk (and growth). Some don’t like those as they will cut growth “too early” according to some. I figure at my age there is little difference. As the years go by I can always rebalance and/or change holdings.

 

[Legal Eagles]

I am a devotee of John Bogle, and so my stock investments are a broad index fund... Vanguard Total Stock Market Index... that is instant diversification, low turnover, low dividend yield, and a negligible expense ratio. If you want international exposure (I do not) substitute Vanguard Total World Index...

If you want some bonds, add in the Vanguard Total Bond index...

Most US market measures are near all time highs... it is easy to get overly confident when it seems the market cannot loose, but can you hold your position when the value of your holdings just got cut in half? I held in 2000, 2008, and 2020... but it was gut check touch and go at times... frankly a monkey throwing darts at the Wall Street Journal could have made money post Covid... it is not skill but rather tenacity... "time in the market" not "timing the market" if you will...

Stock market investing is not for the faint of heart, or the dilettante I think myself pretty savvy, and even I do not dabble in individual stock... the information deficit is simply too large, and not in my favor. For every Nvidia there is an Enron...

But in one sense you are correct...
"
The first million is hard, but the second million is inevitable." - Brian Tracy

 

[Lubener]

They always say to diversify for safety of your portfolio and to also expose it to more possible gains, but imo looking at the history of stocks and etfs etc. Most all of them have quadrupled at one point or another. You could turn 250k into 1 million or more pretty quickly imo.

Opinions?

Another get rich scheme. Most of the time, it doesn't work.

 

[The motor guy]

I am a devotee of John Bogle, and so my stock investments are a broad index fund... Vanguard Total Stock Market Index... that is instant diversification, low turnover, low dividend yield, and a negligible expense ratio. If you want international exposure (I do not) substitute Vanguard Total World Index...

If you want some bonds, add in the Vanguard Total Bond index...

Most US market measures are near all time highs... it is easy to get overly confident when it seems the market cannot loose, but can you hold your position when the value of your holdings just got cut in half? I held in 2000, 2008, and 2020... but it was gut check touch and go at times... frankly a monkey throwing darts at the Wall Street Journal could have made money post Covid... it is not skill but rather tenacity... "time in the market" not "timing the market" if you will...

Stock market investing is not for the faint of heart, or the dilettante I think myself pretty savvy, and even I do not dabble in individual stock... the information deficit is simply too large, and not in my favor. For every Nvidia there is an Enron...

But in one sense you are correct...
"
The first million is hard, but the second million is inevitable." - Brian Tracy

Of course when something goes from 125/share to 425 in only a few years I'm usually a little leary to buy when it's sitting at 425 lol

 

[supton]

But in one sense you are correct...
"
The first million is hard, but the second million is inevitable." - Brian Tracy

I’ve been seeing more lately about how it’s supposed to be easy, once you get to 100k. Not sure if that’s the financial pundits trying to make people feel better about the long road ahead or what.

Me, I’m looking forward to not the $1M mark (for a long time, many thought of that as the number to hit) but rather the $1.1-1.2M mark. At that point, the nominal 9% S&P 500 growth means that my portfolio ought to be making six figures in interest. That ought to feel good! the idea that my money is making a halfway decent wage all by its lonesome self. $2M surely comes quickly after that.

 

[The motor guy]

I’ve been seeing more lately about how it’s supposed to be easy, once you get to 100k. Not sure if that’s the financial pundits trying to make people feel better about the long road ahead or what.

Me, I’m looking forward to not the $1M mark (for a long time, many thought of that as the number to hit) but rather the $1.1-1.2M mark. At that point, the nominal 9% S&P 500 growth means that my portfolio ought to be making six figures in interest. That ought to feel good! the idea that my money is making a halfway decent wage all by its lonesome self. $2M surely comes quickly after that.

Yeah if I ever got to that point I'd just quit working and live off the interest, then go travel or something

 

[supton]

Of course when something goes from 125/share to 425 in only a few years I'm usually a little leary to buy when it's sitting at 425 lol

The best time to buy was in the past. Just like housing.

Buying on a regular basis, on a monthly or weekly basis, isn’t sexy but seems to be the easiest and most surest way to building wealth. Just takes a few decades that’s all, but on the flip side, if you look at the actual amount put in, compared to its growth, the money you put in is not nearly as large. 10-20% taken off the top, before spending on anything, can yield huge money after 30 years or so.

 

[Dave Hess]

It will take a while to go from $250K to $1M if you want low risk investment(s).

Momentum trading can be very good **if** you don’t get greedy.

 

[jetman]

Warren Buffets said "diversification guarantees mediocrity".

 

[supton]

Yeah if I ever got to that point I'd just quit working and live off the interest, then go travel or something

All depends. Once you retire, some portion of the money ought to be put into lower risk (and thus lower growth), that way if the market has a downturn and then stays stubbornly down, you don’t wind up with “buying high and selling low”. The more you have, the more you can leave in aggressive growth, the less you have, the more you need to safeguard.

Usually the advice is about 4% withdraw rate in retirement, but I’m not sure what diversification that is, what percentage of stocks to bonds, or aggressive vs non-aggressive growth stocks. Usually people like to think they will get 40% of their income from SS, but in reality, it’s up to 40% and above a certain income level, SS bend points are hit—and of course, there’s all sorts of doom and gloom about SS benefits going down in the future. That aside, that’s where the usual advice for 10 years income in retirement savings comes from: 10 years income, times 4%, is 40% of that income, plus 40% from SS, makes up 80% of your preretirement income, which somehow is ok in retirement, as somehow the pundits believe retirees don’t do as much in retirement. [If that doesn’t sound like what you’d want, you can start to think about how much you want to save so as to afford the retirement that you want.]

 

[vavavroom]

Recovery from a massive loss is possible when you are young with time on your side but the older you get the less you can afford to take risks, especially when it comes to a big chunk of your assets. Taking extraordinary risks is a young person's game.

 

[Legal Eagles]

I’ve been seeing more lately about how it’s supposed to be easy, once you get to 100k. Not sure if that’s the financial pundits trying to make people feel better about the long road ahead or what.

Me, I’m looking forward to not the $1M mark (for a long time, many thought of that as the number to hit) but rather the $1.1-1.2M mark. At that point, the nominal 9% S&P 500 growth means that my portfolio ought to be making six figures in interest. That ought to feel good! the idea that my money is making a halfway decent wage all by its lonesome self. $2M surely comes quickly after that.

With inflation, a million bucks just is not what it used to be...

My one personal feelings are that if one wants to leave a legacy and be ABSOLUTLEY SURE one will not run out of money, and keep pace with inflation, one can withdraw 3% of one's portfolio each year (see sequence of return risk)...

If you do not care about leaving a legacy, but do not want to outlive your money, one can take 5%...

One million dollars then generates between $30,000 and $50,000 per year... not bad especially when combined with SS (if it still exists), but not the retirement life of luxury most people look forward to...

Do not get me wrong, a million dollars is a LOT of money, and more than most people will ever have, but it is not the magical number it used to be in the 80's and 90's... if one can have other income streams like rental real estate, that helps as well, but who really wants to be a landlord in their golden years?

The Paradox Of $1 Million

How much is $1 million? It's a lot of money — more than the vast majority of people will ever accumulate. It's also not enough to make you rich. This paradox is a useful tool for educating younger generations about wealth.

www.forbes.com

 

[Zee09]

There should be a BITOG rule on these threads. In order to give great investment advice we must-see atleast one brokerage account or your overall portfolio..
I never said this in my life but old age is ruling my brain these days. Knowing @AutoMechanic can do it to you.

If it was that easy, everyone would be doing it. We need losers to create winners. Remember that

 

[supton]

Warren Buffets said "diversification guarantees mediocrity".

Of course he could say that. He could own $100M of one stock… and $100M of another… and $100M of another… he could be both diversified yet highly invested!

The less money you have the less you can gamble. But when you are young and have time on your side, then picking slow growth funds is not necessarily wise.

 

[99Saturn]

Numerous examples of stocks that went south and never recovered.

I might have a couple of Lehman Brothers shares kicking around...maybe they will make a comeback.

 

[Legal Eagles]

Another get rich scheme. Most of the time, it doesn't work.

Get rich quick never works... the objective is to get rich slow... 20% of your pretax income in an S&P 500 Index fund from age 20 to 65... pay yourself first, never touch it, never sell it, and you will get rich slowly... no scheme, just patience, discipline, compound interest, and the time value of money... however much you make, someone somewhere is living on 80% of that amount and you can too.

It is like losing weight... the idea is simple... but not easy... if it were easy everyone would do it.

 

[Dave Hess]

There should be a BITOG rule on these threads. In order to give great investment advice we must-see atleast one brokerage account or your overall portfolio..
I never said this in my life but old age is ruling my brain these days. Knowing @AutoMechanic can do it to you.

If it was that easy, everyone would be doing it. We need losers to create winners. Remember that

I agree with you.

Fancy Las Vegas billion dollar casinos were built by losers, not the winners.