[Xiao]

You may be jeopardizing your retirement with this strategy.
When you have a high income, you might have more flexibility in how you invest for the future.

Recently, I reviewed the retirement portfolios and strategies of three couples. Most of their funds were invested in index funds within their 401(k), which is a solid approach.

However, around 10% of their investments were in individual stocks, including tech, penny stocks, and options, as well as crypto.

Upon closer review, it turned out that about 80% of these holdings, particularly the penny stocks and options, had experienced losses since their initial investment.

When I asked them about their investment choices, they all mentioned that they hoped to “hit a home run” with these picks. It’s natural to want to outperform the market, but relying on individual picks can sometimes lead to setbacks in the long run.

For retirement planning, it’s generally best to stick with a consistent approach based on historical data.

While it might seem less exciting, a steady, methodical strategy is often more reliable for achieving long-term goals.

[Paul]

10% is quite the restraint. Most people in that situation would have more. I see no problem with gambling 10% of the portfolio if the other 90% is in index funds

[Jason]

Don’t most fin-experts say a client can “play” with up to 10% if they want? Isn’t the right answer usually “what the client wants?” The math ain’t mathin’ on 10% “jeopardizing” retirement.

[David]

10% toward risk or gambling in a portfolio is a far cry from “jeopardizing your retirement” IMHO.

In my experience looking over thousands of people’s finances, it’s usually a lot higher than 10% going toward gambling high-risk stuff. So, I’m impressed they are only doing 10%.

I put 10% of my portfolio in individual stocks and crypto.

I originally did it for fun to write about on my blog to see how it does over time compared to my VTSAX and Chill approach.

So far they are all way up lol, but who knows 20 years from now.

To me 10% is that perfect amount where if it goes to zero it would not affect me and if it did well it’s extra money.

[Author]

Posts