Most of my life, I’ve been financially illiterate. I don’t have much saved compared to a lot of posts here.
I’ve always kept my savings as cash. Not for emergencies but to use in many years down the line, closer to retirement.
Should I grow my savings pot in cash? Or best to invest it in those ETFs for long term growth?
Thanks
Should I invest my life savings into S&P 500 and All World?
byu/CherryAntAttack ininvesting
Posted by CherryAntAttack
9 Comments
Alot of this depends on you, your situation, and your goals.
More generally, something like VTI (Vanguard Total Market Index) would give better diversification than just the SPY (S&P 500 ETF)
Yes
It depends on your age and risk tolerance.
Yes but keep 3 months worth of emergency funds in a high yield savings account
A lot of this depends on your age, amount saved, living situation (home owner, family, etc), risk level, any non-home debt you may have.
Generally though I’d say it’s good to be at least invested in some amount if you can. In most cases you’ll want some cash too or an easy way to get cash (i.e. I have a margin account so if I need a couple thousand I’ll just borrow it then pay it back ASAP from my salary so that I can avoid taxes by selling things).
The easiest thing might just be a target retirement date fund because it will slowly become less aggressive as you get older. Ideally in a retirement account but you could just use a regular account as well. ETFs like you mentioned are good too and usually have the lowest fees, just pure stock might be more volatile depending on your situation. Even like a money market fund can help you avoid losing money to inflation.
Sounds good. If you have a schwab account, you can dump your savings into a money market fund like SWVXX and setup weekly sells of SWVXX and weekly buys of SWPPX and SWISX or whatever combination of mutual funds. Set and forget with automated investing. In the long run, just keep enough savings in SWVXX for emergencies.
Time in market beats timing the market.
What’s All World? What’s the ticker?
No. Depending on what specific All World Index the ETF would be based on, it would still be between 58% and 72% based on SP500. You either put everything in the All World, but spread it over a few months. Or put half in SP500 and the other split between Europe and Asia.
Check out /r/Bogleheads basically some people do 70% US total stock and 30% global total stock without US. And or add 10% bonds. I could be wrong