QQQ is just overlap with the others. Overweighting growth is just recency bias.Hello,
My son just turned 18 and starting his financial future. While he is in school, his expenses are covered.
He has a taxable stock account that I started last year with a small amount. He also works part time and contributes to Roth IRA, he will max this out each year for the next 4 to 5 years, no idea what will happen after that.
As a young person with a long time horizon, is there a recommendation for his core investments to be in and percentage allocation in each? His goal is to be in all stocks, aggressive with high tolerance for risk.
Currently we're thinking of the following mix:
- VTI 60%
- VUG 10% (to give some extra weight to growth stocks)
- VXUS (International), 30%
- Also considering QQQM. If mutual funds are better, we could put in Fidelity fund equivalents.
The taxable account, he uses to buy individual stocks. Is this a good idea? Are there certain characteristics to lean towards or stay away from?
Insight is appreciated. Thank you in advance.
If my son I would recommend the following only if he can stand deviation and hang with it.
40% VTI
20% AVUV Avantis US small cap value
20% VXUS
20% AVDV Avantis International small cap value
If the above is too aggressive just go 70% VTI and 30% VXUS.
Adding QQQ or large growth is just overweighting expensive parts of the US market and making the portfolio less diversified.
Buying individual stocks is a losers game. Only 1 in 20 stocks will outperform TBills. Stay with diversified funds in a diversified portfolio. Low cost index or rules based factor funds. Don’t chase sectors like technology or whatever the next game changer being pushed.
Statistics: Posted by BitTooAggressive — Sun Sep 15, 2024 2:39 am — Replies 2 — Views 127