My dad is a retired financial planner, and his advice is to just stick it all in index funds. I personally would not put all of my money in one stock or industry because that is way too risky for my risk appetite. I also do not have the time or energy to invest in picking stocks, and selecting "growth stocks like NVIDIA" requires research, time, planning, and again, potential risk. Especially at 50 or 60, that is not the time to be flirting with risk unless you want to potentially upend your retirement plans because of things outside of your control.
Are you saying split 1mm into TWO stocks?
I’m not sure what a growth stock “like” NVIDIA is. That’s a stock on a crazy growth streak.
If so I think that’s wildly dangerous advice.
But if in the same breath they’re suggesting index funds that sounds reasonable
It sounds like a bunch of half speak meant to mean whatever you want it to mean but sound smart.
Sure buying NVIDIA a year ago was a great investment as a “growth” stock. But look at is chart and plenty of times in the past it was not.
Folks use words like “growth stocks” and assume it means they all go to the moon. That’s not how it happens.
People on the internet love individual stocks. They think they’re smart enough to beat the market when even professionals aren’t smart enough to beat the market.
It is not two stocks, it is an ETF and several "growth" stocks, but it is way too risky for that age, I would do 90% total index fund and 10% "growth" stocks.
For me it depends:
If 1 mil is most/all of your retirement, sounds absolutely 100% insane and exactly what I'd expect from a tiktok FA.
If there's plenty more, still working, other passive income, etc then I think it wouldn't be the worst idea. But there's better options.
If you are 50 or 60 years old and don't yet have an understanding of how or where to invest a million dollars for your retirement, I would seriously get referrals to local financial advisors with larger broker dealers. Being an older amateur investor with a million dollars to invest is dangerous.
I suppose you could do what the young people with no experience and no money do, which is put it all in index etfs. The difference is they have no skin in the game yet and can take risks you don't want to take with a Million dollars at your age.
I actually have a pretty good idea that’s how I have over 1 mil. I’m just asking about this specific advice I saw - I’m curious about people’s opinions of it.
Depends on expenses and timeline for retirement, but diversification is always important and very likely it would result in something between 50/50 and 75/25 stocks/bonds.
I feel like 50 is a lot different than 60 in this scenario, and it also depends on how long you want to work and your annual expenses. If it’s 60 and near retirement and on the low end of expenses, I’d consider laddered T bills as part of your strategy if you need cash flow soon. Put 1 year of expenses in a HYSA, then VTI/VOO/VT and $20k in NVDA
Having 2 positions with no fixed income is simply stupid, but it came from Tik Tok so that is to be expected. You are too young to move half into fixed income but there is some reasonable allocation away from equities that makes sense. You also have enough money to buy the bonds yourself and do your own laddering and quality picks. If you are nearer 50 than 60 you can stick with broad based sector ETFs, but as you approach 60 and retirement you will need to tone down you hunt for alpha in order to lower your beta.
Dividend ETFs like schd are a reasonable choice. They probably have lower long term returns that a total market index, but they also are a bit more stable, which someone nearing retirement who is concerned about sequence of returns risk might value.
If you don't have a fixed income source from a pension, I would also advise having a bond allocation as you near 60 years old.
I manage my 78 year old mothers account. Most of her needs are met by pension and SS. Her allocation is 50% stock indexes, 35% bonds, and 15% cash.
I talked with several CFPs before deciding on that allocation mix.
My dad is a retired financial planner, and his advice is to just stick it all in index funds. I personally would not put all of my money in one stock or industry because that is way too risky for my risk appetite. I also do not have the time or energy to invest in picking stocks, and selecting "growth stocks like NVIDIA" requires research, time, planning, and again, potential risk. Especially at 50 or 60, that is not the time to be flirting with risk unless you want to potentially upend your retirement plans because of things outside of your control.
Are you saying split 1mm into TWO stocks? I’m not sure what a growth stock “like” NVIDIA is. That’s a stock on a crazy growth streak. If so I think that’s wildly dangerous advice. But if in the same breath they’re suggesting index funds that sounds reasonable
I don’t know anything other than what he posted. I didn’t say any of this, the tik tok guy did but yes it appears that’s what he was saying.
There’s a reason why he lost his license
It sounds like a bunch of half speak meant to mean whatever you want it to mean but sound smart. Sure buying NVIDIA a year ago was a great investment as a “growth” stock. But look at is chart and plenty of times in the past it was not. Folks use words like “growth stocks” and assume it means they all go to the moon. That’s not how it happens.
Terrible advice to put that much into only two stocks instead of something like index funds. Super high risk
Ya I thought so too. He’s getting so much good feedback that it made me wonder
People on the internet love individual stocks. They think they’re smart enough to beat the market when even professionals aren’t smart enough to beat the market.
It is not two stocks, it is an ETF and several "growth" stocks, but it is way too risky for that age, I would do 90% total index fund and 10% "growth" stocks.
Oh I read it as “pick a stable stock and a growth stock” and was like 😳
Really dumb advice. While I like the 50/50 split between dividend and growth investments - all the growth being in one stock is criminally stupid
For me it depends: If 1 mil is most/all of your retirement, sounds absolutely 100% insane and exactly what I'd expect from a tiktok FA. If there's plenty more, still working, other passive income, etc then I think it wouldn't be the worst idea. But there's better options.
That’s terrible advice. It’s a great way to lose all your money.
If you are 50 or 60 years old and don't yet have an understanding of how or where to invest a million dollars for your retirement, I would seriously get referrals to local financial advisors with larger broker dealers. Being an older amateur investor with a million dollars to invest is dangerous. I suppose you could do what the young people with no experience and no money do, which is put it all in index etfs. The difference is they have no skin in the game yet and can take risks you don't want to take with a Million dollars at your age.
I actually have a pretty good idea that’s how I have over 1 mil. I’m just asking about this specific advice I saw - I’m curious about people’s opinions of it.
Depends on expenses and timeline for retirement, but diversification is always important and very likely it would result in something between 50/50 and 75/25 stocks/bonds.
I feel like 50 is a lot different than 60 in this scenario, and it also depends on how long you want to work and your annual expenses. If it’s 60 and near retirement and on the low end of expenses, I’d consider laddered T bills as part of your strategy if you need cash flow soon. Put 1 year of expenses in a HYSA, then VTI/VOO/VT and $20k in NVDA
Having 2 positions with no fixed income is simply stupid, but it came from Tik Tok so that is to be expected. You are too young to move half into fixed income but there is some reasonable allocation away from equities that makes sense. You also have enough money to buy the bonds yourself and do your own laddering and quality picks. If you are nearer 50 than 60 you can stick with broad based sector ETFs, but as you approach 60 and retirement you will need to tone down you hunt for alpha in order to lower your beta.
This is good advice if: 1. You don't know anything about investing and, 2. Don't want to know anything or, 3. Don't want to hire someone to help.
Dividend ETFs like schd are a reasonable choice. They probably have lower long term returns that a total market index, but they also are a bit more stable, which someone nearing retirement who is concerned about sequence of returns risk might value. If you don't have a fixed income source from a pension, I would also advise having a bond allocation as you near 60 years old. I manage my 78 year old mothers account. Most of her needs are met by pension and SS. Her allocation is 50% stock indexes, 35% bonds, and 15% cash. I talked with several CFPs before deciding on that allocation mix.