December 25, 2024
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Tesla (TSLA) is one of the most talked-about stocks in the market, which has attracted both skeptics and avid supporters. Some investors see it as a game-changing company with much more to give, while others are not impressed by its stock volatility. For a 38-year-old military veteran with a rather strong financial foundation, this debate is quite relevant.
After retiring because of injuries sustained overseas, this veteran has achieved a remarkable setup: He has maxed out a $15K emergency fund, his Roth 401(k)s, IRAs and he has a steady income thanks to his business.
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With $500 monthly to allot to high-risk investments, he is debating whether to put his money into TSLA or go all-in on leverage . Due to his confusion, he contacted Reddit, where fellow investors advised him.
Skepticism About Leveraged ETFs
The consensus in the r/ETFs community thread started by the inquirer is that leveraged ETFs are not a good option for the 38-year-old military vet’s plans.
“No leveraged ETFs. As far as they shoot up, they can shoot back down. They are more an ultra short-term trade and nothing else,” a comment says.
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However, in a reply to this comment, another Redditor mentions a few newer options worth checking.
“There are some new leveraged ETFs that are leveraged for the long run. Check out BTGD. Bitcoin and gold for the long run,” the Reddit member says.
Plenty of Support for Index Funds
The support for Index Funds in the comments of this thread is astonishing. Although the investors on the board have different favorites, some have explained why.
“Something like VOO is more popular than the QQQs because of the expense ratios. You can expect the QQQs to eat up more of your earnings than something like VOO, however, the upside may be slightly higher,” explains a Redditor in the comment section.
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A second board member has enumerated all the funds he invested in and likely recommends that the military vet consider them, too.
“I invest 100% in total-market, index-based, low-cost mutual funds. Specifically, I use mostly Vanguard’s Total Stock Market, Total Bond Market, Total International Stock Market, & Total International Bond Market funds.”
Alternative High-Risk Suggestions
Many more cautious investors who have gone the low-risk ETF route suggested the veteran consider these types of investments, as they would bring him plenty of money in the long run.
“VGT & IYW are proven winners. If you really want moonshots, consider TOPT, MAGS or SMH. Any of those might sh*t the bed pretty hard whenever the inevitable market crash happens, but if you stick with it over time, I think you'll be printing money later,” a risk-taker in the comments said.
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Another member of the r/ETF community on Reddit mentioned active ETFs, as they are not as high-risk as leveraged ETFs and a great alternative and named a few the retired veteran can look up.
“You can try active ETFs like JEPQ, JEPI, QYLD. They use tech options for holding. Good return. They are good for bull market but still give you return for bear market,” the investor said.
TSLA and Individual Stocks
No one in the comments explicitly recommends TSLA as a good investment and advises against buying individual stocks and equities.
“Buying individual stocks or sector funds creates unnecessary & uncompensated risk; I avoid doing so,” a Redditor writes.
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This article 38-Year-Old Military Vet With Pension Wants High-Risk Bets for $500/Month – 'Should I Dump It All in TSLA or Go All-In On Leverage?' originally appeared on Benzinga.com
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