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Diversify yo' assets. I recommend starting with ETFs, ensuring you aren't locked into specific companies. And ETFs don't have the specific conditions of mutual

Diversify yo' assets. I recommend starting with ETFs, ensuring you aren't locked into specific companies. And ETFs don't have the specific conditions of mutual funds. Several stock ETFs; I suggest one tuned for growth and one tuned for dividends. If you aren't sure, the Vanguard VOO ETF is a solid starting point. At least one bond ETF: I'm inexperienced there, but they tend to move in inverse correlation to stocks. Some cash: 6 months of income, if you can swing it. You'll want to set up a plan to invest regularly, and a regular rebalanceing of the portfolio to ensure one asset class doesn't dominate the others and expose you to too much risk. If you want to allocate 10% to things like gold ETFs, futures, Bitcoin, etc, that's not unreasonable, but you should do so with the understanding that such a play is a high risk one and likely to result in monetary loss without quite a bit of care. edit: you have two kinds of risk: downside risk and counterparty risk. Downside with investing is your money might go away. Barring radical economic collapse, it'll come back, eventually (> 5-10 year span), if you've diversified enough. Counterparty risk is what if the event you're worried about doesn't happen. Suppose you're worried about a recession. What if it doesn't happen? People were seriously worried about Total Economic Meltdown in 2008. Lot of people got out of the market or didn't get in, and they wound up with a lot less money than if they'd held on. On the other side, guns, ammo, and food supply companies went gangbusters. And, looking back on it, pointlessly. It's reasonable to assume the bull market will end. It's running a bit long as it stands now. Fine. Do you care if your stock money all drops by half, so long as it's back and more within a decade? Make a plan designed to optimize for your goals and rigidly stick to it in the face of irrationality.

sytelus 9y ago
US ETFs are no longer diversification. Now that everybody is doing it, when market goes down ETFs will fall from sky as well at same or faster rates. More importantly, most ETFs are tied with one market, one country and one currency. For true diversification, you want to have gold, oil, Chinese, Russian, Asian along with usual American ETFs.
- pnathan 9y ago
  You expose yourself to currency risk as well with that strategy. I primarily worry about single company failures and wobbles; if the US economy implodes, the rest of the world will be caught up in it. But you're right, you should balance with non-US as well. I've steered clear of them, myself, but that's not per se ideal practice and I'm overdue for a rebalancing. But, to be clear, I was sketching an entry level into investing, not a more sophisticated approach.

sytelus 9y ago

US ETFs are no longer diversification. Now that everybody is doing it, when market goes down ETFs will fall from sky as well at same or faster rates. More importantly, most ETFs are tied with one market, one country and one currency. For true diversification, you want to have gold, oil, Chinese, Russian, Asian along with usual American ETFs.

pnathan 9y ago
You expose yourself to currency risk as well with that strategy. I primarily worry about single company failures and wobbles; if the US economy implodes, the rest of the world will be caught up in it. But you're right, you should balance with non-US as well. I've steered clear of them, myself, but that's not per se ideal practice and I'm overdue for a rebalancing. But, to be clear, I was sketching an entry level into investing, not a more sophisticated approach.