Why This Wall Street Investor Says No Single Thing Is the 'Perfect' Investment

The perfect investment: myth or reality?

When it comes to investing, the phrase "perfect investment" is often used by Wall Street professionals -- but what does it really mean? Many investors believe that the perfect investment exists and that if they find it, they will be able to make a fortune. However, this is not the case.

Vivian Tu, a professional Wall Street investor who goes by the handle YourRichBFF on YouTube, recently said that if there was such a thing as the perfect investment, she would already be a billionaire living in Bora Bora and not be making internet investment videos! While there is no perfect investment, Tu says that these three investments are good starting points for beginner investors who don't know where to begin.

Target-date funds

The first type of investment is target-date retirement funds. A target-date retirement fund is an investment option that can be especially beneficial for those who don't have time to actively monitor their investments. An investor chooses the fund based on their expected retirement year. For example, if you are in your mid-30s and want to retire around age 65, then the Vanguard Target Retirement 2055 Fund may be right for you. The "2055" refers to the year the fund will mature.

The investments are diversified within the fund, with assets shifted from stocks (higher risk/reward) to bonds (lower risk/reward) on the estimated retirement year entered. As the retiree nears their target date, the fund will become more conservative to reduce volatility, protect capital, and help ensure adequate resources will be available when it comes time to retire. All this makes a target-date retirement fund an attractive option for those who wish to save for their retirement, but may not have the time or desire to do so by manually constructing a portfolio.

Index funds

The second type of investment is an index fund. Index funds track and mirror indices such as the S&P 500 or NASDAQ Composite index. Investing in index funds can be a great way to build wealth over time. With low fees and reliable returns, they offer an attractive option for those looking to grow their retirement savings.

Unlike individual stocks or bonds, these funds do not require much effort on behalf of the investor, as they are passively managed by professionals. Index funds are a good choice for investors who want to invest in the market but don't have the time or resources for active trading. Best of all, there are plenty of free trading apps that you can use to buy index funds.

Robo-advisors

Finally, another great option for beginner investors is a robo-advisor service like Betterment or Wealthfront. Robo-advisors are investment platforms and online tools that provide automated investing services. It uses algorithms, analytics, and automation to help investors manage their portfolios. Through the investment app or online platform, users can access and control their investments with ease.

Robo-advisors provide service 24/7, making them easier and more convenient for busy individuals who do not have the time or resources to actively monitor their investments. Users also benefit from features such as investment advice tailored to individual goals and risk tolerance, automatic rebalancing of portfolios, tax-loss harvesting, and portfolio diversification. This can help investors save valuable time while making informed investment decisions.

Although finding the "perfect" investment may be impossible, there are still plenty of good options out there for beginner investors. Target-date retirement funds, index funds, and robo-advisors all offer ways to diversify your portfolio. Diversifying helps you reduce your risk, optimize your returns, and meet your long-term financial goals!