High-Risk Investing: A Military Veteran’s Dilemma
A 38-year-old military veteran, who has built a solid financial foundation, is torn between investing in Tesla (TSLA) or exploring high-risk options. With a maxed-out emergency fund, Roth 401(k), IRAs, and a steady income from his business, he has $500 monthly to allocate to high-risk investments. Seeking advice, he turned to Reddit’s r/ETFs community.
Skepticism Surrounds Leveraged ETFs
The majority of Redditors cautioned against leveraged ETFs, citing their volatility and short-term nature. “They can shoot back down as quickly as they shoot up,” one commenter warned. However, another investor suggested exploring newer, long-term leveraged ETF options, such as BTGD, which focuses on bitcoin and gold.
Index Funds Gain Traction
Index Funds received overwhelming support from the Reddit community. Investors praised their low expense ratios and long-term potential. One Redditor recommended VOO over QQQ, citing the former’s lower fees. Another investor shared their portfolio, comprising total-market, index-based, low-cost mutual funds from Vanguard.
Alternative High-Risk Options
Some investors suggested exploring alternative high-risk options, such as VGT, IYW, TOPT, MAGS, or SMH. While these investments come with higher risks, they could potentially yield significant returns over time. Another Redditor recommended active ETFs, like JEPQ, JEPI, and QYLD, which use tech options for holding and offer good returns in both bull and bear markets.
TSLA and Individual Stocks: A Cautionary Tale
Not a single commenter explicitly recommended investing in TSLA or individual stocks, citing unnecessary risk. “Buying individual stocks or sector funds creates uncompensated risk; I avoid doing so,” one Redditor wrote.
Private Market Real Estate Investments
In a low-interest-rate environment, certain private market real estate investments offer high-yield opportunities. Arrived Home’s Private Credit Fund, for instance, has historically paid an annualized dividend yield of 8.1% and requires a minimum investment of only $100.
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