What would you recommend for an aggressive investment strategy?
I'm 50 years old and I have $10,000 to invest. As I understand it, I can't retire until I'm 67 so that's another 17 to 20 years for investing purposes. I'm looking at putting the $10,000 into an aggressive high gross investment strategy. What kind of advice do you have for me so I can execute this investment? I'm also trying to learn and understand investing. Would you recommend I can invest and control it myself, as opposed to having to go to other entities to make it happen?
This is a very complicated question, so I will answer it in generalities. At 50 years old, you are approaching a critical point where you have to start worrying about your retirement. Whether or not you want something aggressive needs to be put in context to what you have, how much you can save, and what you need to retire comfortably. To be candid, $10,000 is just not enough. That being said, you may have a retirement plan at work or a pension at retirement, so I don't want to presume anything.
Many people look at returns to justify decisions, but it is more important to understand risk. For individuals that have never invested before, selecting investments is very difficult. You hear people on television or at a cocktail party and figure this investing thing is pretty easy. However, most people want to invest when things feel good which is usually when the markets are up. They also panic and sell when things are bad. This can really have a negative impact on the individual and their investments. The best thing to do is find a professional to help guide you through this process. Investing shouldn't be about maximizing returns. It should be about maximizing risk adjusted returns within the context of an individual's risk tolerance.
I would not invest in stock market investments at all. This is not enough money and you don't have enough time.
At 10% growth and 20 years, you'll only have $73k. That's nothing for retirement. You need more income to invest.
Use the money to educate yourself on business ownership. Learn all you can about marketing, online business and building a following.
That's likely your best option. With hard work and some luck you may be able to create a business that pays you $73k in annual income. Or more.
Then you can take that money and put it in public market investments, like stocks and mutual funds.
Hope that helps!
While you may want to pursue additional income streams, you can still put the $10,000 to good use over 17-20 years in a properly balanced ETF portfolio. Based on your total financial picture, you can still tolerate some risk/higher growth potential over that time period.
Be sure you get an honest recommendation so that you are comfortable with your decision. An advisor should be able to give you a more specific direction after a free consultation.
Consider leveraged [Ultra Short] ETF's. If you are 'bullish' on a specific sector or indice, leveraged [that means earning up to four times the return on the index] is an option. No loads [front or back], low cost and highly versatile in that you can attache Stop/Trail Stop Orders on these investments as they trade like stocks. I definitely recommend utilizing Stop Orders when utilizing leveraged funds. The Beta's on these funds, of course, will be higher as Market Beta is always set at 1.0 so a leveraged position,say two times earnings, its Beta may be as high as 1.45 meaning you are carrying 45% more risk than the index.
Following on what Dan had to say, this is a difficult position to be in and to advise on over the internet. High growth isn't going to make a significant difference in how many months of living expenses that $10,000 grows to, and it can put that $10,000 at risk.
I would ask that you might consider some reflection on your success to find financial security so far on your own. If this $10,000 investment is a significant part of your plans at this point, perhaps you would have benefitted from professional guidance, rather than going your own way, to this point?
I can tell you to invest in high-quality, diverse mutual funds, but, what happens if the market crashes?
I would encourage sitting down with a professional, rather than continuing to go things on your own and avoiding retirement. There are a lot of questions on what funds to use here that I've answered for those in this 20's with $10,000, but being in your 50's is another story. I would not be so against paying for advice to keep going on the current path. At some point, I don't know that I advise understanding investing versus keeping money in safe assets for those situations where investing may only mean a few months of living expenses at the risk of even losing those few months.