Kinda. Though, it’s more optimistic than that. The beauty of broad market funds is that the entire stock market doesn’t go to zero or crash forever like an individual company/industry might. Short of the country ceasing to exist, the market is virtually guaranteed to recover eventually. That’s why if you regularly invest no matter what and don’t try to time the ups and downs, you always come out on top in the long run. Just look at 2008 or covid. You may be down 50% this year, but 5 or 10 years later, odds are you’ll be up a good amount. Long-term investing is easy that way. Gets more difficult if the market crashes right before you were planning to retire and now you have to work 5 extra years because your portfolio wasn’t hedged. Hence the bonds and other low-risk investments.
You can’t put all of your money into the market, becuase if the market crashes and you lose your job (because the market crashed), the last thing you want to do is sell your stocks when they’re at their lowest point. So the general rule is to keep 3 to 6 months of expenses in a savings account. Then other large purchases like a house or car can be accounted for in savings/other less risky investments too.
Real estate is generally a bad investment for your average joe. Primary residence is good tho, if your living there for about 5+ years, but that’s because it’s an investment AND a thing you get use out of.
Kinda. Though, it’s more optimistic than that. The beauty of broad market funds is that the entire stock market doesn’t go to zero or crash forever like an individual company/industry might. Short of the country ceasing to exist, the market is virtually guaranteed to recover eventually. That’s why if you regularly invest no matter what and don’t try to time the ups and downs, you always come out on top in the long run. Just look at 2008 or covid. You may be down 50% this year, but 5 or 10 years later, odds are you’ll be up a good amount. Long-term investing is easy that way. Gets more difficult if the market crashes right before you were planning to retire and now you have to work 5 extra years because your portfolio wasn’t hedged. Hence the bonds and other low-risk investments.
You can’t put all of your money into the market, becuase if the market crashes and you lose your job (because the market crashed), the last thing you want to do is sell your stocks when they’re at their lowest point. So the general rule is to keep 3 to 6 months of expenses in a savings account. Then other large purchases like a house or car can be accounted for in savings/other less risky investments too.
Real estate is generally a bad investment for your average joe. Primary residence is good tho, if your living there for about 5+ years, but that’s because it’s an investment AND a thing you get use out of.