Should I go with QQQ or VOO plus individual tech stocks in my Roth IRA?

Hello Jeremy,

I am an Earner, and I first saw you on Earn Your Leisure. Since then, I been looking into index funds and ETFs. I opened a Roth IRA through my bank and was advised to get an ETF high in tech, so I found QQQ. But I then realized it had a higher expense ratio. I saw in your IG posts to avoid those fees, so would I be better off just getting VOO and purchasing more individual tech stocks in the same account? Ps: Thank you in advance for everything bc there is so much information out there, and it can be overwhelming. Also, I love how you broke down the steps to the plan. I’ll most definitely be following those steps. I’m just trying to set myself up to be financially free in the most passive way possible. I truly appreciate you. -Tina

Welcome Tina!

Well, I’d slightly disagree with the tech recommendation (despite being a tech guy myself, tech entrepreneur, master’s in computer science, etc). I think it’s largely people suffering from recency bias. Yeah, the last 10 years tech has done great… but now the price and expectations are SO HIGH could that POSSIBLY CONTINUE AT THAT BREAKNECK SPEED for the NEXT 10 years? The answer is I have no idea, so I don’t bother speculating. Instead, I think it’s wise to fully diversify across all sectors to make sure you own the one that’s currently low and DOES go up over the next decade and beyond.

That said, if you’re buying ETFs I’d go with a 3 fund portfolio of something like this:

  • 54%: VTI (Total US Stock Market)
  • 36%: VXUS (Total International Stock Market)
  • 10%: BND (Total Bond Market)

That basically has you fully diversified in global stocks and bonds at a minimal cost. If you want to pick stocks or skew toward tech, I might recommend going with a 3 fund portfolio for MOST of your investments and save the rest (maybe 10%) to pick and choose more speculative stuff :slight_smile:

1 Like

Ok, I see what you’re saying about not knowing how tech will play out in the future and having more diversification. I’ve checked out each of these ETFs and have a better understanding. So I’m going to just get started w. what I know now bc “I dont want perfect be the enemy of good” lol

I also just had someone better explain my Roth 401k plan to me and realized that I am no where near maxing it out so I’ll focus on that and use Robin Hood to get the ETFs

Thanks gain :slightly_smiling_face:

1 Like

Yes! Exactly. Don’t let perfect be the enemy of good! Following the two rules is what actually makes a difference. Everything else is just optimization tweaks. :slight_smile:

1 Like

Hi @Tina,

@Jeremy is pretty spot on with those allocations. Even with those bonds if you want to split it up into 7% BND and 3% BNDX, it could work. Here is a snippet from the Bogle book I just read.

2 Likes

Thank you. The visual helps. Also, I actually just got put on to the Bogle book today for the first time. lol

1 Like

Love that you’re screenshotting a Bogle book! My man!!!

1 Like