I think about selling an appartment and putting the 300k into VOO (Vanguard 500 Index Fund ETF) as my retirement plan. (I'm 30) This would be my first investment towards retirement. I did quite a bit of research and if i understand correctly this is one of the safest investments i can make long term/for retirement, right? I pretty much came to this conclusion after listening to warren buffetts and dave ramseys advice. (I know dave recommends mutual funds but an S&P 500 ETF i think is very close and the rest of his advice still applies.) My biggest priority is not loosing the money but growing it so i can retire. This is not meant to be a short term investment. So what do you think, should i go for it or are there risks that i'm missing? Also is there a difference between different S&P 500 ETFs? If so is this a good one and what to watch out for? (I found VOO because of warren buffett) I guess i mainly want some confirmation since i'm still pretty new to investing (started a year ago or less). I THINK my plan is good but of course i do not want to find out it's not by blowing 300k. Keeping the appartment is not an option. I also really don't trust "financial advisors". I'm 100% debt free including a paid off house (which i want to keep) and i'm also anti debt. I'm currently single. I pretty much have everything i need so right now i'm mainly worried about protecting myself for retirement or worse in case i became unable to work. Also while i made my situation sound very good so far, there is one big problem. I'm not worried for no reason. Because of personal reasons (not going into details but NOT because i'm lazy) i was not working until recently. As a result i'm already behind on retirement and now i'm super stressed about not having enough to retire or becoming unable to work.
Since the VOO started 13ish years ago it's gone up 300 percent. There's no reason to not believe it won't go up 300+ more percent over another 30 years. And Vanguard is awesome in the low-fee category. Hard to beat %.03. P.S. And don't forget to elect to re-invest those dividends!
It depends on if you can stomach the ups and downs. I couldn't. I retired early with what I thought was a reasonable nest egg just before the Tech Wreck in 2001. I watched the account drop by 50%. I didn't sell at the bottom and after a few years it recovered although some of the individual stocks didn't. With the S&P you'll be better off than with individual stocks because S&P will cull the losers and in the long run has always managed to recover. What you have to consider is if you can stand the drawdown once you are not receiving any other income. Take a look at David Carters book ; The 12% solution. A market timing strategy of sorts.
Yes, but only if you can handle the ups and downs, you will experience 30-40% draw downs, but over 30 years you should be good. If you know you can leave it for 30 years even when you go through draw downs, go for it.
If you have done that a few years ago, you can retire with peace of mind. There are some high-quality blue chips/ETFs that are worthless. Also, some stocks/ETF prices can reach the moon and beyond. BUY LOW SELL HIGH or BUY HIGH SELL HIGHER? You can also consider buying an insurance annuity. All the best mister.
How about half in VGT and half in VOO? VGT is the Vanguard tech ETF. Sharpe Ratio 1 yr is 0.97, 3 yr is 0. 51 and 5 yr Sharpe is 0.76 YTD return is 39%. VOO Sharpe Ratio 1 yr is 0.63 and 3 yr is 0.55 and 5 yr Sharpe is 0.56. YTD return is 17.65%.
Be careful - you may be hanging on to lowish return + volatile money for decades if we are in fact in a major market top right now, similar to pre dot-com bust. If you had invested in VFINX (the Vanguard S&P500 tracking fund) in March 2000 just before the bust and held through today, your annualized return would be 6.6% and your $300k investment would be worth $1.4 million today. But you'd have lived through -50% drawdowns twice during the period. Alternatively you could do some crude market timing like golden cross. That would achieve about the same return with -17% drawdown. Black line is the timing system, pink is buy and hold: Possibly you can enhance your overall return by deploying the money elsewhere when the system says be out. Not to mention you avoid the -50% drawdowns + the mental stress.