The FOUR BEST Ways to Invest

Investing can be complicated. You can stress yourself out and agonize over the best investment or the right strategy. You can sit on the sidelines, convincing yourself that every down day in the markets was a bullet dodged and you were better off NOT investing, only to watch markets soar months later and regret not getting in when things were lower.

These are four of the best strategies for new investors:

SLOW + STEADY

If you work a job you love and could see yourself doing it until you’re 60, then you’re really, truly, just investing for retirement. You want to know when the day comes to hang up your boots forever, there’ll be enough money to get you through until it’s lights out.

The best approach here is likely to have your 401k through your work (if offered). Consider a broad market ETF like an S&P 500 index fund or a total market fund. Many 401ks offer target date funds, which can be okay, but can also be VERY heaily exposed, possibly unnecessarily so, to bonds when you’re in your 20s-40s that can eat away at larger returns over time.

You should then open a Roth IRA and maybe even an individual (that means taxable) brokerage account.

Here’s what I’d do:

401k: 50% S&P 500, 30% technology, 20% dividend

Roth IRA: 100% technology fund for the larger returns (that will end up being tax free) such as FTEC/VGT/XLK

(they’re all nearly identical - don’t overcomplicate picking the best one - they’re all good, but you only need one).

Individual account: one S&P 500 etf (like SPLG/VOO/SPY) and one dividend fund (like SCHD/SPHD/SPYD)

The individual account allows you to potentially retire earlier if you want WITHOUT tapping into your retirement money (thus avoiding a penalty).

LESS SLOW + MOSTLY STEADY

This approach gives you a little faster growth, but can increase your risk. It’s good to still build off the foundation of ETFs in the various types of accounts from above. But here, you’re maybe NOT in love with your job and you would ideally NOT want to wait until you’re 60 to retire.

You might even wanna retire in your late 40s or early 50s.

This approach involves the ETF foundation: one tech in a Roth IRA, one S&P 500 and one dividend in a taxable account, but the percentages are a little different from above. Here, you’d focus on 50% tech, 30% S&P 500, and 20% dividend.

This might mean for your Roth IRA, you max it out with $7,000 in FTEC, but then you CONTINUE to invest in FTEC in your individual account as well. Yeah, the profits you take from your individual account will be taxed, but that’s fine. You’re happy to pay some taxes if it means you can retire earlier.

This approach also involves investing in a handful of individual companies. But which ones? Ultra high risk, speculative companies? Nope. Large cap growth stocks. If you don’t know how to find them, the easiest thing to do is check the top 10 holdings of some tech (FTEC) and growth (SCHG) ETFs.

Use their 10 top holdings to go shopping. Yes, you already own these stocks in your ETF, the difference is, their growth is impacted by the HUNDREDS of other companies in the funds.

This is why an S&P 500 index fund can have AAPL, which is up 537% in ten years, but the S&P 500 fund is only up 177% in ten years, even though it holds AAPL. Because there are lots of other stocks that can drag down the overall performance. It’s the same reason why a tech fund like FTEC is up 446% - it’s got a heavier concentration in technology - less diversity in the way, which slows down growth. And yet, it’s STILL not up as much as Apple.

This approach involves the same funds, but the addition of individual stocks. Mostly high quality stuff like AAPL/NVDA/META/V/AMZN, etc.

These individual stocks would likely have to end up in your taxable individual account, which is okay because your goal is to get higher returns earlier, allowing an early retirement.

HIGH RISK + HIGH REWARD

Up next, and you’ll notice a trend, we’re still building off the ETF foundation. We’re picking a technology ETF, an S&P 500 etf, and a dividend ETF, but we’re adding more things to get us to the finish line a LOT earlier. You weren’t born to work. You don’t wanna have a hunchback, sitting at your desk working for some asshole until you die.

You want to be free - a LOT earlier.

Your portfolio will be comprised of the same boring ETFs to give you insurance and peace of mind that, if ALL ELSE FAILS, you’ll still be comfortable in retirement.

But here, your individual account will be heavily comprised of growth stocks. And maybe even a much larger percentage. Yes, this exposes you to more risk. Yes, you need to be aware of this. No, you do not want to take on unnecessary additional risk by crossing your fingers and going all in on penny stocks and meme coins.

You’re gonna focus on 10-20 individual companies. Most of these can be the market leaders: the AAPLs/NVDAs/METAs/MSFTs/AMZNs of the world with the addition of some speculative investments. Think about NEW companies (or newly public companies) with lofty goals for the future.

Think about Apple in the year 2001. They came out with the iPod and iTunes in the same year and after that, everything changed. What companies that are around TODAY could start with something small and then grow in ways we might not even imagine today?

Think about something like UBER, which is still in it’s infancy. When UBER first started, you had to drive a black Lincoln Town Car in order to work for them. Imagine if that’s all UBER ever was. But in a capitalistic world, no company ever just wants to offer one thing. If you had the vision to see past Lincoln Town Cars, you’d be very happy with your investment today.

Think about companies like CAVA, HIMS or SOFI - what are they now? And what COULD they be in a decade? Yes, you’re exposing yourself to increased risk. YES, these companies might flop. There might be a competitor that pops up and destroys them. This is the risk with investing in speculative companies.

For every Chipotle or NVDA, there are dozens of PTONs and SIRIs. For every META there is a Snapchat. That’s the risk. You could spread yourself too thin and a little of everything. Or you could do deep dives on the fundamentals using my free fundamental analysis template here to research.

SUPER HIGH RISK

This portfolio involves the biggest risk of all. You’re going ALL IN on big growth and speculative investing. You don’t want the cushion. You don’t want a boring dividend fund. You don’t want a traditional slow and steady S&P 500 etf. You want 100% tech and growth. Your retirement account is aggressive (yeah, still need to rebalance and reallocate money into bonds and dividends when you get older).

Your ETF portfolio looks like this: 100% FTEC in a retirement account.

100% FTEC in your individual account.

10-20 individual companies that make up the top growth funds like SCHG and FTEC and maybe even QQQM.

10 additional companies that are high risk/high reward. You can find companies like this by looking up the top 10 holdings of something like a midcap growth ETF like IWP:

Is this riskier? Yes, of course. CAN it get you to the finish line fast? MAYBE. Is this advisable for most investors? That’s a question only you and your financial advisor can answer. Do you want to take on that much risk? If you don’t, that’s fine. I’d wager most investors don’t want to roll the dice with their hard earned money.

Depends on what kinda investor YOU want to be.

As always, all of this is just for educational purposes and is by no means financial advice. If any of these appeal to you, you need to contact a financial advisor and discuss your goals with them.