Whats the best way to diversify 100k in retirement assests? VOO etf? Thinking mainly a low cost SnP 500 etf. Thanks!

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Bitcoin and scratchoffs

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I’d sprinkle in some doge coin and then keep some bills under your bed to ensure maximum diversification

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OP, Low cost index funds are probably the best way to do it, especially if you don’t want to think about it for few years. Look at Emerging Markets Index funds as well since returns are likely going to be higher in the long term ( if you are not worried about short term volatility)

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Do whatever PWC2 says, ignore others 😏

Don’t abuse diversification. S&P 500 is already diversified - you own 500 stocks, how much more you want

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I would just add this advise: when you are closer to retirement ( i.e. when you want to use money) start watching your investment returns closely for few years. When returns are decent/good ( e.g. like last year) move money out of index funds to fixed income (e.g. bonds)

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Bcg : Did you just quote Reddit as a source for investment advice?

Did you just recommend dumping money in one go, instead of dollar cost averaging?

I am a bit overwhelmed with your gems of wisdom. Why did I not think of this earlier, damn.

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Thanks all

Look up the bogleheads three fund portfolio. Also read up on reddit about investment timing - most recommend dumping it all in at one time vs dollar cost averaging

OK this is a link from an investment company. Have you heard the adage - ‘never ask a barber if you need an haircut’ .

What works better for vanguard to get 100 k in one go or over 2 years? They mention something about their research, which is just a lip service. No link to the research methodology or results.

Besides logic of DCA is not higher return but less risky returns. Vanguard has very skillfully inserted that in last few lines.

I’d be delighted if you posted a link to your historical study of DCA vs lump sum investing, but I have a hunch that you are just an opinionated and risk averse person.

Great post A1. I think DCA is another form of diversification of risk (i.e. risk of market going down over the investment period). Like any diversification strategy, it lowers both risk and rewards. The argument against DCA is the same argument against diversification. If you are okay with slightly lower returns that comes due to you lowering “market timing” risk, DCA is the right strategy. If not, hold the nose and take the plunge like BCG1 says - knowing that the “odds” are with you :)

Yup thanks

You are quite right in comparing DCA with diversification, never thought of it this way. It’s a great analogy.

But there is one difference - diversification, if you go by modern portfolio theory can actually increase returns. A portfolio can theoretically beat ( on risk adjusted basis) all underlying individual securities. DCA doesn’t make that claim.

However I don’t believe in modern portfolio theory, it’s place is in textbooks - so your analogy is quite apt.

Now waiting for BCG to throw a link to prove me wrong or play Sherlock and guess more of my personality traits 👍

Enjoy your lifetime of below average returns

BCG1, above average returns comes from taking above average risk. The basic rules in finance are like the laws of gravity - very hard to escape (as long as you are on this planet.) I would rephrase to say: enjoy lifetime of “risk optimized returns” 🙂

BCG: Enjoy life of above average cockiness and below average intellect.

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