Tips for a 20 Year Old's Investment Portfolio

I'm an undergrad currently, and during the pandemic I got really into investing. 100% degen at first and somehow ended up turning 2k into 30k on what was, in hindsight, a laughable speculative investment. Now that I am preparing for an SA stint and future career, I think it's time to start investing like an adult. I'm thinking some low-cost vanguard ETFs, skewed at growth and more volatility (I'm 20 so my time horizon is pretty long) but also some more total market exposure, with a dividend focused ETF as well. Overall, thinking VUG, VTI, SCHD, and VOO, with some equities tossed in here and there that I particularly like. I was thinking even some REIT exposure through VNQ.  Does anyone have any ETFs they think are great long term, or any tips in general on this subject?

Comments (20)

  • Intern in AM - Equities
Jan 2, 2022 - 1:56pm

Same age as you and was able to grow to a $80k portfolio. To be honest with your time horizon I would go Vanguard ETFs but also overweight FAANG. We are so young that even if you lose -20% bc of Fed tightening or some catastrophic event there is enough time to recover. FAANG, Disney, NVIDIA, maybe some Nike or Costco if you want to diversify from tech.

I personally don't want to wait till I'm 60 years old to reap the benefits of VTI versus taking on more risk with overweight tech and 5% exposure to crypto.

Hope this helps.

Jan 2, 2022 - 2:28pm

That's definitely helpful and I actually do own some DIS and WMT right now, also want to add Costco for sure. As far as the FAANG stocks go, I completely agree and I plan to own all of them, I guess my hesitancy for entering right now is looming interest rate hikes in 2022, but to be honest I may start DCA into them so that I'll just be averaging down even if they pullback in 2022/23.  I also do want some exposure to crypto, but don't know too much about the space besides most of the big players and their use cases. 

  • Intern in AM - Equities
Jan 2, 2022 - 5:11pm

That's incredibly fair. I would DCA into FAANG over the next 3 months. Even with rate hikes companies like Alphabet (Google), Apple and Microsoft will still be cash generating giants. 

On the crypto front I have 4% of my money in Bitcoin & Ether and then 1% in things like Solana, Polkadot, Polygon & Chainlink.

  • Associate 1 in IB - Gen
Jan 3, 2022 - 7:46am

I don't think anyone our age working in finance should be at all concerned about "the fed hiking rates" or "an upcoming crash." Is this the last $ you will ever invest? If not, I would not be concerned at all. My portfolio dropped like hell during covid but now if you look at a chart of my assets, you can't even spot covid if you don't know when it happened. In fact, the amount my portfolio fluctuates now in $ terms is larger on a normal week than it did during covid. My point is let's say the market tanks 50% for 5 years. Okay, so you get 5 years of bonuses and salaries to buy at a 50% discount?

Jan 3, 2022 - 9:16am

That's a very good way to look at it! I definitely plan on investing aggressively on a monthly basis in the future, so in truth even a huge COVID like drop would just be an opportunity to buy assets on sale. Thank you!

Jan 4, 2022 - 2:45pm

I second this, when you're young (like us) you want the market to fall if you have the cash, creates a great buying.

If you could plan it out to a T, you would want the market to stay insanely low until the day you retire, then you would want it to shoot up. However, that must likely won't happen, thats why you want to see it grow over time.  

Jan 3, 2022 - 11:50am

I'm actually in a pretty similar position as someone going into a SA position as a sophomore. Just wanted to throw an idea out there regarding asset allocation. I saw some of the other responses recommended putting 5% in crypto. Personally, I have a lot more than 5% in crypto because I think blockchain and DeFi are going to be massively big and I want exposure to that. What I would recommend is weighting whatever portion you put to crypto 95% Bitcoin and Ethereum and 5% Altcoins like Solana, Cardano, AVAX, MATIC, ALGO, LINK, etc. That way the vast majority of your crypto is in the two bluechip stalwarts but you still have exposure to the upside of promising defi projects.

Just my 2 cents. As I said, I'm navigating this situation just like you.

  • Intern in AM - Equities
Jan 3, 2022 - 9:06pm

I was the person who commented about the crypto allocation. I agree. Only reason why I am not aped into crypto as my assets are approaching six figures and I'd like to buy myself some real estate after college. As I am lucky enough to be in that position I need to have less of a risk tolerance to ensure I can put a 20% downpayment.

 I agree practically have everything in Bitcoin & Ethereum and then sprinkle around into projects you believe might have upside. If they go to 0, whatever. If they 10x. Fantastic. 

Jan 3, 2022 - 1:24pm

No comments on what to invest in but just keep an eye on the fact that you may be forced to divest certain names depending on where you're headed for the summer/Full time. Generally ETFs are good to go but single names and Meme stocks especially tend to set off alarms at compliance. 

Array

Jan 3, 2022 - 2:00pm

Any name the firm has on it's internal black list - basically companies with whom the firm is currently or has recently/actively done business with. The assumption being someone at the firm has MNPI and it's better policy to blanket ban ownership and/or transactions in that name. 

Array

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Jan 4, 2022 - 2:52pm

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