Reddit Erupts Over 34-Year-Old's Plan: 'My Strategy Is To Add $2K Monthly' – Is His Mix Of ETFs And Dividends A Genius Move Or A Bad One?

Building a strong investment portfolio requires an allocation for growth, one for stability, and a last one for income, especially when it comes to planning for retirement.

One widespread investing strategy involves mixing dividend-paying assets with broad-market ETFs, allowing investors to profit from both compounding revenue and long-term capital appreciation. By continuously investing a fixed amount each month, investors can grow their wealth while minimizing risk through diversification.

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Still, this strategy is often debated with some wondering whether dividend-focused ETFs are necessary for younger investors or if growth ETFs would deliver better returns in the long run. In a recent Reddit post, a 34-year-old investor shared he’s just starting his investing journey and is wondering whether his planned allocation can help him reach his financial goals.

His strategy involves allocating $2,000 per month across a mix of ETFs and dividend stocks, including 40 % to Vanguard S&P 500 ETF VOO, 20% to Invesco NASDAQ 100 ETF QQQM, 15% to Vanguard Total International Stock ETF VXUS, 15% to Schwab U.S. Dividend Equity ETF SCHD, and 10% to SPDR Gold Shares GLD.

The poster’s goal is to build a portfolio that will generate substantial returns by the time he reaches his 50s or 60s. Yet, he's open to advice, especially regarding his 10% allocation to GLD. The Reddit community has offered the investor plenty of suggestions in the comments, so let’s jump into these right away.

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Is the Investor’s Planned Allocation a Good Strategy? Reddit Weights In

Opt for Small or Mid-Cap ETFs

Several Redditors argued that gold may not be the best choice for a young investor with a long time horizon. Instead, they suggested small- and/or mid-cap ETFs or even bond funds for better growth potential or stability.

“I like everything except gold. I'd look into small/mid-cap ETFs, and maybe a total bond ETF if you’re worried about volatility,” a commenter wrote.

Suggesting other assets and even Bitcoin instead of GLD, this Reddit user appreciated most of the poster’s allocation: “Love it besides the GLD. I would go either with a small/mid-cap ETF or Bitcoin if you are interested in that.”

This commenter suggested the investor’s portfolio should be more focused on U.S.-based stocks rather than international assets.

“Too much international, and way too much gold. Would add some small- and mid-cap instead,” he wrote.

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Focus on Growth While Young

Many Reddit users argued that dividend ETFs like SCHD are less ideal for a 34-year-old investor, as growth-focused ETFs historically outperform over long periods.

“Zero reason for SCHD at that young of an age in my opinion,” a comment reads.

Suggesting that focusing on growth-oriented ETFs while young would reap better yields in the long run, this Redditor mentioned that the investor should shift to dividends when approaching retirement only.

“Because you are young, you could benefit from the time horizon and reap better returns from growth-focused ETFs over dividend ETFs, even taking into account dividend reinvestment. Closer to retirement you can transition to a dividend-focused portfolio,” he wrote.

“I’d skip QQQM and go 50% VOO, 25% VXUS, and 25% SCHD,” a commenter recommended.

Another Redditor suggested a similar allocation but also included GLD, saying, “I would drop the SCHD and QQQM in favor of more VOO and more VXUS. 65% VOO (or better [Vanguard Total Stock Market ETF VTI]), 25% VXUS, 10% GLD.”

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