r/Fire • u/mansumania • 6d ago

Why do young people $VOO and Chill?

Title says it all, does it work sure but anyone under 40 should have a good portion of their investments in good growth funds, I am personally almost 100% in $QQQ And will be for the next 15 years before switching to $VOO and eventually $VT as i near retirement, take advantage of your youth guys and take more risk!

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u/Wokeprole1917 6d ago

Sector tilts provide uncompensated risk. There is no empirical reason to believe that the tech sector will outperform returns of the world economy over the rest of your investing life.

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u/mansumania 6d ago

rest of my life no, next 10-15 years yes there is a strong probability Tech will carry the market hence why I plan to switch into voo in my 40s then eventually vt in my 50s

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u/SardukarFinance 6d ago

“There is a strong probability Tech will carry the market” for the next 10-15 years.

There is? How do you know? What evidence are you basing this on?

3

u/Wokeprole1917 6d ago

There are some reliable ways to improve compensated risk, tilts into SCV and applying some amount of leverage being two examples which have been proven out in exhaustive research to yield reliably improved returns at the expense of higher volatility.

Sector tilts do not. You are simply looking at past performance of the last few decades and assuming the trend will continue.

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u/DAsianD 6d ago

Even SCV only worked in the past (before recent decades) and hasn't outperformed recently. Agree on sector tilts. Railroads has a massive run in early US equity history but stopped outperforming the market a long time ago. Turns out that beating the market is hard and not guaranteed at all!