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Advice on being better diversified

3,111 Views | 36 Replies | Last: 7 yr ago by Casey TableTennis
UnknownStranger
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quote:
BI just wanna know what OP does for a living to have those assets on a single income
Get a good job with a good company at the right time in the right industry. Work hard. Get promoted earlier than most. Work for a company that grows so your stock grants etc grow too. Live below your means. Save like crazy. And we've only been 1 income for a little while. The rib worked for 10 years outta school (teacher).

Lot of luck involved.

quote:
Taxes aside..

If someone gave you a million bucks to invest, would you put it all in a single stock?
Nope. I'm working to fix it. Made a lot of headway this week. Good news is my company's stock has been an outstanding performer over the last 10 years. So I didn't get bit. But this was the point of my post. I began to get more and more uncomfortable with my situation. This thread has been therapeutic for me. Thanks everyone for the advice.

Question I have now is: If someone gave you a million bucks to invest, what would you buy right now? ;-)
41332
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If you're in your 30s, just buy an index fund that tracks the s&p 500 or if you want to go a little broader buy an international index. But the s&p 500 has a ton of international and fx exposure.
Casey TableTennis
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AG
Your potential liquidity needs and risk appetite/capacity/tolerance will all be major factors of course.

Buying an S&P like fund/ETF is easy and what many US investors would do because it is comfortable. Don't subject yourself to the home bias, consider where valuations are and virtually any metric will point to US stock valuations being historically high. That doesn't mean a crash is coming, but there is a lot of reason to doubt significant upside domestically over the next 5+ years.

Whatever your stock allocation is, I would suggest leaning that component toward int'l, especially emerging markets. If the $ weakens as most anticipate sometime in the next decade, it should provide a nice tail wind to those int'l equity markets. Given your age and apparent lack of liquidity needs, you might be able to tilt heavily.

There are many other nuanced decision to make, but if you work with someone capable of guiding you to an appropriate stock/bond mix, setting an appropriate US/int'l mix, consider if alternative investments are appropriate for you, manage cost, manage taxes over time, and modify the plan as your life and the markets change... you will be well ahead of the game. Good luck to you.
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