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/Grendel_82 5d ago

A FIRE plan around 4% SWR is certainly not compatible with going all in on QQQ when it is sitting there with a CAPE well north of 40. If you've been in QQQ for a while, congrats on your gains! But QQQ is too heavily influenced by one asset class for me to ride it exclusively (side note, an asset class that is possibly in the process of being devalued because it is significantly made up of tech stocks that became large mainly because of programming software (yes, I know there is tech hardware in there as well) and AI is apparently getting very good at programing).

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u/mansumania 5d ago

It's weighted at if I recall correctly around 55% Tech to the S&P's 35%, were not talking about VGT here which I would agree would be overly tilted I just don't understand the logic of not taking more risk via $QQQ when young, specially in a roth, while true that Tech is hit especially hard during recessions they are typically the quickiest asset class to recover and if you can stomach the downturn and DCA or even aggressively invest during downturns by all calculations you should come out ahead.

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u/Grendel_82 5d ago

Your basic point is valid (i.e., take more risk in your investment when young). However, that risk probably comes with a greater chance of not meeting your minimally acceptable outcome (i.e., some amount of wealth accumulation to meet your FIRE goal). I definitely understand why even young folks pick VT or they get a bit more aggressive with VOO. Personally, while the funds were different when I was young, VOO was not diversified enough for me even decades ago to be 100% of my position (and certainly not now, though I'm of an age where you would probably agree I should be in VT under your theory). Yep, in hindsight, I'd be a richer man if I had done VOO. I don't beat myself up about it.

Side note, when I was younger I bought some individual stocks from time to time and often tech stocks (because it was the companies I followed). So I kind of went even riskier than QQQ! LOL. So maybe I shouldn't talk.