SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. I’m in my mid-40s, married with four kids. My husband doesn’t want to work and has left the financial responsibilities to me for as long as I can remember. I don’t have much in my savings account or in my 401(k). My annual income is only around $85,000. My eldest is about to start college, which I will have to pay for out of pocket as I have not set up a college fund because money has always been tight. I n ...

Core Insights - The article discusses the balance between investing in individual stocks versus index funds, emphasizing that while individual stocks can be appealing, they are generally more volatile and risky [1][6][18] Group 1: Individual Stock Investment - A significant portion of low- and moderate-income Americans, 54%, are investing in capital markets, with a preference for individual stocks over mutual funds and ETFs [3] - Investment experts recommend starting small when investing in individual stocks, suggesting that only a small percentage of a portfolio should be allocated to them, especially for retirement savings [5][6][7] - It is advised to avoid overconcentration in any single stock, with a guideline that no single position should account for more than 5% to 10% of the overall portfolio value [9][10] Group 2: Diversification Strategies - Diversification is crucial, meaning holding different types of assets across various sectors and markets, which can mitigate risks associated with individual stocks [12][13] - Experts suggest that investors should own at least 25 diversified stocks to spread risk, while others recommend focusing on 5 to 10 stocks with a strong track record [14][15] - The article highlights that many individual stocks may underperform, and it is the few successful investments that will drive overall returns [20] Group 3: Market Performance Expectations - The article notes that actively managed funds often underperform the market, and this trend applies to amateur stock pickers as well [17][18] - Investors should not expect to consistently beat the market by selecting individual stocks, as many will not perform well [19][20]

Core Insights - Michael Burry, known for his successful prediction of the 2008 financial crisis, has made numerous forecasts about market collapses from 2017 to 2023, which have largely not materialized as he anticipated [1][2][3][31] - Despite his sharp insights into systemic risks, Burry's predictions often failed to align with market momentum, leading to significant missed opportunities and losses [3][31][32] Group 1: Predictions and Market Responses - In January 2017, Burry warned of a global financial meltdown and potential World War III due to overleveraged debt markets, but the S&P 500 rose 19% over the following year [5][6] - By September 2019, he compared the rise of index funds to the CDOs that contributed to the 2008 crisis, yet the market continued to rally, with the S&P 500 increasing by 28% that year [7][8] - In December 2020, Burry took a $530 million short position against Tesla, calling its valuation "ridiculous," but the stock doubled in value shortly after [9][11] - In January 2021, he reiterated his bearish stance on Tesla, which continued to rise, leading to significant losses for his position [12][13] - During the GameStop frenzy in January 2021, Burry cautioned against the sustainability of such rallies, only to see the stock surge another 1,000% shortly after [14][15] - In February 2021, he described the stock market as "dancing on a knife's edge," predicting a recession, but the S&P 500 continued to climb [16][17] - Burry's warnings about Bitcoin in February 2021, predicting inflation would destroy its value, were contradicted by Bitcoin's subsequent rise to new highs [18][19] - He labeled Robinhood a "dangerous casino" in February 2021, but the platform's user growth and stock price continued to soar [21][22] - In June 2021, Burry predicted the "mother of all crashes," yet the S&P 500 rose 15% year-to-date, demonstrating market resilience [25][26] - In September 2022, amid a bear market, Burry forecasted more stock failures, but the market rebounded sharply by the end of the year [27][28] - His largest bet came in August 2023, with a $1.6 billion wager against the S&P 500 and Nasdaq 100, which ultimately expired worthless as the market advanced [28][29] Group 2: Analysis of Burry's Approach - Burry's predictions often highlighted real vulnerabilities in the market, such as inflation and speculative bubbles, but his timing consistently faltered [31][32] - The missed opportunities resulting from following Burry's signals amounted to trillions in market cap gains for retail investors [33] - Burry's legacy serves as a reminder that even the most astute analysts can misjudge market dynamics, emphasizing the importance of timing in investment strategies [34]

Core Viewpoint - The Trump administration is proposing to allow retirement plans like 401(k)s to include private equity and alternative assets, which could benefit high-net-worth investors but may pose challenges for average American savers [1][2]. Group 1: Potential Benefits - The executive order aims to "Democratize Access to Alternative Assets for 401(k) Investors," potentially allowing everyday workers to invest in private companies and other non-publicly traded assets, which could lead to higher returns for average 401(k) investors [2][3]. - Financial experts suggest that this change could provide new investment opportunities that were previously unavailable to regular retirement savers [3]. Group 2: Risks and Concerns - Experts caution that while there is potential for higher returns, there are also significant risks involved, including less visibility into the performance of underlying assets since they are not publicly traded [4]. - The introduction of private equity into 401(k) plans may come with high fees, which contrasts with the current trend of moving towards lower-fee ETFs from higher-fee mutual funds [6]. - The implementation of these new investment options may take time, with the average 401(k) investor unlikely to see these options for several months or even up to a year due to regulatory processes [5].

Core Insights - The integration of digital assets into retirement portfolios should emphasize fundamental investment principles, focusing on strategic asset allocation and disciplined management [1][3][4] - Platforms must prioritize education, transparency, and long-term alignment to build trust with investors, particularly regarding retirement savings [2][4] - The shift towards including digital assets in retirement strategies represents a fundamental change in wealth building and risk management [4][5] Investment Philosophy - A "philosophy-first approach" is advocated, suggesting that crypto should be viewed as legitimate portfolio components rather than speculative instruments [1] - The importance of a disciplined, passive management style is highlighted, with products like crypto ETFs and index funds being recommended for long-term wealth building [1][3] Education and Trust - Financial platforms are urged to lead with education to help investors understand risks and diversify responsibly [2][4] - Building genuine trust in a decentralized world is essential, with transparency and decentralization being key components [6][8] Security and Risk Management - The inherent volatility of the crypto market necessitates a cautious approach to managing risks associated with digital assets [5] - A distinction is made between established, low-volatility assets like Bitcoin and more speculative altcoins, which are challenging to include in pension portfolios [5] User Experience and Accessibility - Simplifying the user experience is critical for mainstream adoption, with platforms needing to create intuitive interfaces and provide educational resources [11][12] - Reliable customer support is emphasized as a vital element in building long-term confidence among investors [13] Conclusion - The future of retirement is seen as a blend of traditional financial principles and the decentralized nature of digital assets, with a focus on education, transparency, and user experience [14]