Convince me not to dump my savings of $40k at age 21 into index funds

This seems serious but don't listen to him. Vanguard found out that it's better to invest all at once instead of dollar-averaging

He just wants to pocket you as a referral

Make sure you pick good indexes. I suggest no tech because tech is too volatile.

7% a year is what you're looking for my dude.

Dollar cost averaging only makes sense for your ongoing investments, not getting into the market.

OP, open a vanguard account and put 90% into total stock and 10% into total bond. Everytime you make money, take 10% of it and stick it into those two funds. Once a year, move money between those two funds to maintain a 90-10 ratio. Every 10 years, shift the mix to more bonds. So in ten years, your target will be 80% total stock, 20% total bond,etc.

If there's some big crash and prices drop, don't panic sell. If you have money to burn, buy more. It will go back up, and you'll have more shares, cheaper.

Do this and before you know it, you'll be rich.

Read The Intelligent Investor.

5% gold (yes, read the fucking book)
5% cash
40% bond index fund (Vanguard or Blackrock)
40% s&p 500 index fund (Vanguard or Blackrock)

Also because using that mix cash would be pretty low at 40k you might need to have the mix a bit different until you can get enough cash to make sure you're covered for unexpected large expenses.

You can vary the mix of the bond and index funds if you want to. So for example let's say that you thought the S&P500 was bubbling then you might de-risk a bit and have 55% bonds 25% S&P 500 index fund.

Also learn about dollar cost averaging for when you are putting more into your savings over time.

Seriously, read the book and educate yourself on this. The book is so straight forward, you just need to actually read and pay attention to what they are saying.

why don t u buy cryptoz instead? Buy the fucking Dip don t be an idiot just buy the fucking dip!

>Vanguard found out that it's better to invest all at once instead of dollar-averaging
The fuck? Source please. I think you're full of shit.

Google it you lazy piece of shit.

investor.vanguard.com/investing/online-trading/invest-lump-sum

40k at 21? invest in yourself. Get plastic surgery you need without getting too much where you look like a bog and get Veeky Forums, this should only cost 10k at most. Use the rest to start a business. Halo effect + own business = chad. Dont give your money to jews

Market is at ATH

>life savings
>21
Stop LARPing

Perfect for a buy in and then sell when it crashes

40% bonds in your 20s is insane. Try 10%, or 0.

This guy said exactly what I was going to post. He knows what's up. Especially **don't panic sell**. If you really want to, it means you overestimated your risk tolerance, and that you should rebalance over time to a less stock-heavy portfolio. But bear in mind that you'll lose a lot of money this way. Also don't "rebalance" in one shot while the market is crashing, that's just panic selling. The crash will do the rebalancing for you.

This is obvious. Over any reasonable DCA duration, the market has increased in value over most time ranges of that duration (more than it has decreased in the ranges that it didn't). If the market goes up while you're averaging you lose gains. If it goes down while you're averaging you prevent losses. So if the market is usually going up, and historically it is, you will lose out on average by dollar-cost averaging.

Having said this, there is something to be said for OP learning his own risk tolerance, and it might be worth the expense to go slowly for this sake.

Pic related.

He said $40k, which is absolutely "life savings" at 21.

you'll blink and you'll wake up 50, wishing you had invested petty money at 21 so you could be banging young women when you're 50. time is never on your side.

>that pic

Without counting the inflation its bogus

The nominal return of the S&P 500 is 10% over the period shown. Inflation was 3%. So fine, subtract a line whose slope is less than 1/3 that of the line in the graph, and see how much it changes the message.

>official government reported inflation

Ok buddy

30 years to recover from the Great Depression.

Now look at current levels of debt, the derivatives market, GDP cooking by every Western nation as they import 70 IQ populations and pretend they're the same as 100 IQ natives, increasing unemployment, increasing concentration of wealth, automation, Chinese housing bubble, car loans, US student loans.

My hat's off to those of you who have the balls to invest in the stock market. I'm in crypto because I fear for the future.

And yet, if you had retired in 1929 and made zero money after that and drawn down 3.5% of your portfolio you still would've made it for 30 years, which is longer than any retirement in 1929 was.

Everybody else just got a decade or two of cheap stocks as they continued to invest, and made a killing.

It's not "ballsy" to invest in stocks unless you are immediately contemplating needing that money.

madfientist.com/safe-withdrawal-rate/

That article goes through the numbers and finds that basically if your portfolio survives the first ten years it will survive the next hundred. It should put your mind at ease about the "safety" of investing in stocks, especially for people like OP who are living off of earned income while their portfolio grows.

Also, I counter your "subhuman 70 IQ will tank productivity" comment with "automation will make everyone with

He said index funds you fucking newfag

>And yet, if you had retired in 1929

don't dump all of it
only invest what you can afford to lose