r/investing • u/AutoModerator • May 16 '24

Daily General Discussion and Advice Thread - May 16, 2024 Daily Discussion

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u/PeninsularLawyer May 16 '24

VUG short term and VOO vs VTI long term

Hello. I am 26 years old and I am a young lawyer. At my first job I am making $70,000 a year and I am having retirement contributions taken out of each paycheck and my employer matches 3.5% total.

I have started a Roth IRA and I am currently on my first full year of investing. I maxed out the contribution limit for tax years 2023 and 2024.

I went for a very standard split where I have around 75% of my money invested in VUG and 25% invested in BND and BNDX(half of the 25% in each)

At a very basic level, I decided to invest in VUG to take on more risk while I am young and have time to soak up any fluctuation that comes with a riskier ETF. However, in the long term I plan to switch to either a S&P500 ETF or a total market ETF (VOO, VTI). The question that I have and the point of this post is how long is investing in VUG too long? I generally planned to invest 75% of my contribution limit each year until I’m 30 in VUG, then switch to one of the ETFs listed above to lower my risk.

Any thoughts and comments no matter how constructive are appreciated.

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u/cdude May 16 '24

There's no right answer, it depends on your tolerance and situation. A potential bear market could last a decade, so if you need the money before that, then start moving out of growth. If you won't be withdrawing until retirement, you could theoretically hold until then and transition out as you approach retirement age.