24 year old’s Roth

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DoctorWu
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24 year old’s Roth

Post by DoctorWu »

I started our now 24 year old son investing in a Roth and a non-IRA brokerage account about three years ago. He still questions the best funds to use. What would you think of splitting inflows to the Roth between VFINX and QQQ.
delamer
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Re: 24 year old’s Roth

Post by delamer »

Don’t know what those tickers are.

But our 20-somethings use the Vanguard Target Date Retirement Funds for 2055 & 2060 in their Roths.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Jovby
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Re: 24 year old’s Roth

Post by Jovby »

DoctorWu wrote: Sat Oct 23, 2021 9:36 am I started our now 24 year old son investing in a Roth and a non-IRA brokerage account about three years ago. He still questions the best funds to use. What would you think of splitting inflows to the Roth between VFINX and QQQ.
There is no “best fund” to use, at least not one that can be determined prospectively. He needs to pick a strategy that matches his risk tolerance and goals and stick with it.

That combo will likely yield good long term returns. However will be very volatile as it is 100% US stocks with a strong tilt to technology. If he believes that technology will outperform the market, and is willing to tolerate the volatility it’s a reasonable choice.

If he is really conflicted just go with a Vanguard target date fund, you really can’t loose with that.
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arcticpineapplecorp.
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Re: 24 year old’s Roth

Post by arcticpineapplecorp. »

vfinx is S&P500 and QQQ is nasdaq (essentially).

If you own S&P500 you only own large cap (mostly, very few mid and no small stocks) and mostly US only.

if you own QQQ you are making a sector bet (mostly) and are undiversified because you don't own all sectors.

I would suggest VT or VTWAX (total world stock market index).

Doing so will give you large, mid, small, value, growth, US and foreign developed, emerging markets, all sectors represented (40+ countries worldwide).

This way you can never be wrong if you own the world because what else could you own (besides private equity) and how could you know in advance what's going to do better than the world?
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Brianmcg321
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Re: 24 year old’s Roth

Post by Brianmcg321 »

I would put it all in VTSAX.

Have him read this:
https://jlcollinsnh.com/stock-series/

And this:http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
Silverado
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Re: 24 year old’s Roth

Post by Silverado »

I fear that split would lead to tinkering. There will likely be a lot of out of phase up and down. Dangerous for new investors (and others unfortunately…) who may try to performance chase.

I vote a single fund. Total Stock or Total World as mentioned.
invest4
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Re: 24 year old’s Roth

Post by invest4 »

I think as simple as possible will serve your son very well (US total stock market with our without Intl). I believe that for many people, (particularly those early in their investing journey) there is often a strong desire to "tinker" and find the "best" setup...many times. I would advocate that he focus on school and work and leverage the simple setup to his advantage...for the long term.
Outer Marker
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Re: 24 year old’s Roth

Post by Outer Marker »

Vanguard Target Retirement 2060. Broad, low cost index exposure to virtually every investable security on the planet in a single fund. https://investor.vanguard.com/mutual-fu ... view/vttsx. Nothing to think about besides trying to maximize savings during early accumulation years.
donaldc
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Re: 24 year old’s Roth

Post by donaldc »

delamer wrote: Sat Oct 23, 2021 10:01 am Don’t know what those tickers are.

But our 20-somethings use the Vanguard Target Date Retirement Funds for 2055 & 2060 in their Roths.
+1

My 23 yo son. 2065
123
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Re: 24 year old’s Roth

Post by 123 »

For the taxable account VFINX is fine to hold. Maybe he should put new money into VTSAX or VTI (Vanguard Total Stock Market) since that can be a generic "Forever" holding.

For the Roth he could divide it up between VTI (Vanguard Total Stock Market Index), QQQ (Nasdaq 100), and VGT (Vanguard Information Technology Index) if he wants to watch a slow horse race for excitement.
The closest helping hand is at the end of your own arm.
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Doom&Gloom
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Re: 24 year old’s Roth

Post by Doom&Gloom »

donaldc wrote: Sun Oct 24, 2021 2:03 pm
delamer wrote: Sat Oct 23, 2021 10:01 am Don’t know what those tickers are.

But our 20-somethings use the Vanguard Target Date Retirement Funds for 2055 & 2060 in their Roths.
+1

My 23 yo son. 2065
+2
24 y/o DS -- 2065
Topic Author
DoctorWu
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Re: 24 year old’s Roth

Post by DoctorWu »

I suggested the Target Fund (my wife and I are heavily invested in the Life Strategy Moderate Growth Fund at age 60) and sent him the info for the Vanguard Target Retirement 2060 fund.
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