30-Year-Old With $65K In Stocks Sparks Debate – 'Focusing Mostly On ETFs' But Now Betting On Bonds, Small Caps, And International Plays

Many investors start their journey toward financial security with stocks, and a successful investing strategy involves considering the risks, adapting, and thinking about the long-term rewards.

For some, a well-balanced portfolio contains stocks, bonds, and small-cap investments, while for others, a mix of international stocks and ETFs is a favorite approach since it offers broader diversification. Either way, a combo of these assets ensures both growth and protection against a market downturn and is a great strategy for those unwilling to risk their money unnecessarily.

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A 30-year-old investor with a $65,000 portfolio has taken to Reddit to ask how to strike that balance in his portfolio. Primarily invested in Vanguard S&P 500 ETF VOO and Invesco QQQ Trust QQQ, he also holds individual stocks like NVIDIA NVDA, Alphabet GOOG GOOGL)), Meta Platforms META, and Microsoft MSFT, but plans to exit them soon.

“I am planning to change the composition moving forward and adding [Vanguard Total International Stock ETF VXUS] (International exposure ETF), [iShares Core S&P Small-Cap ETF IJR] (Small-cap stocks ETF), and [Vanguard Total Bond Market ETF BND along with my VOO and QQQ. I like it boring for my risk profile,” he said.

The poster’s main goal is long-term growth, but he’s open to feedback on improving diversification and managing risk. The r/Portfolios community has shared its thoughts in the comments, so let’s see those.

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How to Diversify a $65,000 Portfolio? Reddit Debates Possible Low-Risk Options

Overexposure to Large-Cap Growth Stocks Isn’t a Good Idea

Several Redditors pointed out that VOO and QQQ heavily overlap, meaning the investor’s portfolio is not as diversified as he thinks.

“You’re just long all the same s–t, large-cap equities. You want multiple return streams in case large-cap equities have a drawdown. If you work a job, own a house, and own equities, you are triple long on the same bet that would destroy you as all are affected by a recession,” a commenter says.

A Redditor pointed out that a mix of large-cap stocks isn’t a complete retirement portfolio, and suggested other assets to balance it.

“Large-cap U.S. stocks can be a great investment, but they’re not a complete retirement portfolio. Other assets should be included, such as smaller-cap U.S. stocks, international stocks, and bonds,” the Redditor wrote.

While not against big tech, this commenter recommended the poster add non-tech exposure in his portfolio.

“I don't see picking high-quality companies that are in the index as redundant, you're overweighting the highest quality companies in the index and which drive its returns. I would look for maybe one high-quality non-big tech name. I love the credit rating agencies (S&P and [Moody's MCO]), but there are others, the three large credit card companies too,” he said.

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Stick to Index Funds

Many advised the investor to drop the individual stocks he holds since they're already covered in VOO and QQQ, creating unnecessary concentration.

“Remove all redundancies and focus on VOO (almost everything you own is in VOO),” a Reddit user suggested.

“Good that you’re making an effort to invest, but there’s a lot of redundancy here. The Mag 7 already makes up a huge portion of VOO, why do you feel that you need to be even more extended in those stocks? If you really want to stock-pick on the side, I’d recommend focusing on lesser-known stocks (not penny stocks) that aren’t heavily weighted in the S&P 500 (preferably not in it at all),” a commenter advised.

Reinforcing the idea that stock-picking isn’t adding value if the stocks are already in the ETF he has, this Redditor suggested the poster go all in in VOO or diversify more.

“I’d diversify some. VOO's major holdings are already included in the individual stocks you're holding. Might as well go more into VOO (and keep [Amazon AMZN] if you’re still really bullish on them),” he said.

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