I have k to invest - index funds or individual stocks?

Investing

Finally saved up ,000 that I can invest (beyond my emergency fund). Im 29 and dont need this money for at least 10-15 years. Everyone on Reddit says just buy index funds and chill but my coworker made a ton on Nvidia and some other tech stocks. Is it dumb to try picking individual stocks? I feel like I could research companies and beat the market. Thoughts?

Sarah Taylor

3 Answers

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Im going to give you the boring but statistically correct answer: index funds.

Facts:

Over 90% of professional fund managers fail to beat the S&P 500 over 15 years

These are people with finance degrees, research teams, and its their full time job

Your coworker got lucky on NVDA, survivorship bias means you dont hear about the people who lost on other "sure things"

What I do (and recommend):

80-90% in boring index funds (VTI, VXUS, or just VT for everything)

10-20% in individual stocks if you want to scratch that itch

This way youre building wealth reliably while still having some fun money to play with. If your stock picks do well, great. If they tank, your portfolio survives.

The boring truth is that investing k in VTI and adding to it monthly will very likely make you a millionaire by retirement. Can you beat that picking stocks? Probably not. But you might have fun trying with a small portion.

Rachel Martinez

Put k in VTI and k in a couple individual stocks to scratch the itch. Youll learn quickly that beating the market consistently is nearly impossible. Most people who try underperform index funds.

Brittany Thomas

Your coworker got lucky on one stock. Ask him about the ones he lost money on too lol. Survivorship bias is real. Index funds are "boring" but boring gets you to millionaire status.