21 year old investor

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roundhouse
Posts: 17
Joined: Wed Mar 09, 2016 10:53 pm

21 year old investor

Post by roundhouse » Wed Mar 25, 2020 2:47 pm

Is the market finally low enough for a 21 yr old to get fully invested in his first Roth IRA? I'm thinking Total Stock Market Index.

retired@50
Posts: 1676
Joined: Tue Oct 01, 2019 2:36 pm

Re: 21 year old investor

Post by retired@50 » Wed Mar 25, 2020 2:57 pm

roundhouse wrote:
Wed Mar 25, 2020 2:47 pm
Is the market finally low enough for a 21 yr old to get fully invested in his first Roth IRA? I'm thinking Total Stock Market Index.
Good idea. Although, for anyone with over 40 years until retirement, it's always a good time to invest.

Regards,
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

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cos
Posts: 32
Joined: Fri Aug 23, 2019 7:34 pm

Re: 21 year old investor

Post by cos » Wed Mar 25, 2020 4:01 pm

roundhouse wrote:
Wed Mar 25, 2020 2:47 pm
Is the market finally low enough for a 21 yr old to get fully invested in his first Roth IRA? I'm thinking Total Stock Market Index.
Time in the market > Timing the market

I'm 22 years old, just a year older than you. I wish I had opened my Roth IRA the day I turned 18. The market hasn't gone lower since. Looking ahead, given the current crisis, things could go lower than they are now, or this could be the bottom. All we have, at best, are educated guesses, and at worst, emotional gambles. If you really want to try timing the market, do your due diligence and do your own research. Piece together the things you know to be true about the market and the current crisis, and make your decision on your own.

Personally, I'm a big fan of the efficient-market hypothesis. I believe that all public information is already priced into the market. I also believe that the world economy will continue to grow for the foreseeable future. Thus, if I were in your position, I would open my Roth IRA and put everything I can into it, likely loading up on VTWAX or VT depending on what my broker offers (Vanguard's Total World Stock Index Fund and ETF respectively).

Full disclosure, I'm fully invested in a pseudo-risk-parity strategy involving leveraged S&P 500 and long-term treasury funds. I want to stress that you should never invest in anything you don't understand. A market-cap-weighted index of the world market is probably the best you can do without knowing what you're doing, hence why I suggested it, but if you're willing to do the research, feel free to follow that link and check out what I'm doing.

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