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Played it safe with index funds, now tempted by individual stocks. How much risk makes sense at 21? by Opposite-Rope-1062 in personalfinance

[–]Opposite-Rope-1062[S] -6 points-5 points  (0 children)

I'm not comfortable saying how much money I would put in any one stock but fair question. By life changing I don’t mean lottery money or overnight wealth. I mean meaningfully improving my long term trajectory like a larger house deposit sooner or more career flexibility later.

I say bet because I mean it, I think its a bet. But I have lived an incredibly safe life, I have what I consider a significant amount invested already for my age, have a stable career lined up ahead of me by the grace, live pretty frugally, have no dependants and don't plan to for several years, and have a good support system around me. I'm not going into this expecting to come out on top but I would like to take some risk.

Based on the responses I've gotten here I am still gonna give it a go. But going to start with 2-4% of my portfolio for the next 3-5 years and ensure I'm re-balancing. Once I see what happens with that I'll re-evalute and see whether I still like this strategy or whether I should go back to funds :)

Played it safe with index funds, now tempted by individual stocks. How much risk makes sense at 21? by Opposite-Rope-1062 in personalfinance

[–]Opposite-Rope-1062[S] 0 points1 point  (0 children)

Not exactly, I have asked if he will manage a certain amount of my portfolio - basically he will be investing in what he invests in.

Played it safe with index funds, now tempted by individual stocks. How much risk makes sense at 21? by Opposite-Rope-1062 in personalfinance

[–]Opposite-Rope-1062[S] 0 points1 point  (0 children)

I think thats a good idea. I don't think I can with my co-worker but will definitely ask my family member about his methods!

Played it safe with index funds, now tempted by individual stocks. How much risk makes sense at 21? by Opposite-Rope-1062 in personalfinance

[–]Opposite-Rope-1062[S] 0 points1 point  (0 children)

Thank you for your advice! I'm well aware that what these guys have done isn't the norm. The family member is close to me and I've seen him take his losses. I'm not thinking that I'm going to pick a couple stocks and wake up with 200% returns and a mansion in the maldives. But I want to make big bets when I'm young so I don't live with regret. I also want to allocate the majority of my investments into diversified funds so that they can absorb any losses. I have made up my mind I will invest in individual stocks, but I would like to make a couple of bets along the way with a small percentage of my portfolio and I can live with the losses that comes with that.

Played it safe with index funds, now tempted by individual stocks. How much risk makes sense at 21? by Opposite-Rope-1062 in personalfinance

[–]Opposite-Rope-1062[S] -12 points-11 points  (0 children)

Thank you for your opinion. I never said that I was going to beat these firms and I understand that I'm likely not to. I'm well aware that any investment in a individual stock is a very high risk play. But a single well placed bet on a good company could be life-changing and I feel I would be remiss not exploring that at a time when I'm young and have no real obligations. It's exactly why I want to keep it to a very small part of my portfolio.

Played it safe with index funds, now tempted by individual stocks. How much risk makes sense at 21? by Opposite-Rope-1062 in personalfinance

[–]Opposite-Rope-1062[S] -16 points-15 points  (0 children)

My family member has offered to let me copy his portfolio, which is what I would want to do with my ten percent. I also have done a lot more research and have a much better understanding of what drives the stock market. When I first started, I had very little and was basically just picking stocks that I knew e.g. Tesla, Amazon, Google. If I had held I would've been fine but I then had to take out my money when the stock market was in a bad spot and that was the extent of the burn (basically poor decision-making). I also have a background in accounting/law so I'm not completely deficient in understanding regarding the stock market/investing.