That is the S&P 500 index funds. This is similar to Warren Buffett’s recommendation. He actually has more recommendations beyond stocks or bonds.
Anyway, I think for most people who are still in the wealth accumulation stage (I think most people before retirement is in this category), low cost stock index funds, plus some low cost specialized stock funds (value, growth, small, mid, large caps) that has a track record, are the ways to invest. I have both in my 401k accounts. And I usually look at them once a year, and do some rebalance (mostly very small adjustments) as I see fit. I do this for my HSA and 529 plan too. The latter 2 are much smaller than my 401ks. But I feel HSA is overlooked by many people and I am also aware of some new changes to the 529 plan (and they are good changes).
有朋友问我401k的投资选择：我一般推荐S&P 500 index funds. 过去十年/二十年 S&P 500 index return 有可能比历史上的9.81% 还稍高一些，应该是可以beat inflation 的。工资不一定，我2000年第一份码工工作工资是$56,000, 现在圣村entry level 的software engineer 大概给个六万或稍多一些。那时候一个新的Camry LE 大概不到两万，现在要三万。当然硅谷大厂的码工收入要高几倍：entry level 也是如此。做OpenAI 等相关热门行业的更高。
但是反过来说如果2012 年买了一万块钱的$NVDA 或者$TSLA, 我觉得我拿不到现在。买准股票和长时间一直拿在手上都不容易。
还有就是不一定非要买magnificent 7 stocks, 其它一些市值小一点股票也有长时间不错的：比如$CMG, $MA, $MCD, $MNST, $SBUX 应该还有不少beat S&P 的。当然loser 更多. On this note, we need to be careful on IPOs and SPACs. Think $BHIL.
My own stupid mistakes on my 401k and IRAs, and turnaround
At one time, probably year 2010 till 2013, I converted my 3 small 401k accounts to an IRA account at Vanguard, then I traded stupid stocks (yes they are stupid stocks looking back), such as Arch Coal (I worked for the company in 2011 and 2012), Alpha Natural Resources (also a coal company) and also “the one time smartphone wonder” Palm. Long word short, I probably lost half of the money when I did all this. Luckily I found out my stupidity and decided to change my strategy. I was able to turn around from year 2017, the pivotal point was actually in year 2015, when I started trading on the Robinhood platform. I know my favorite person or investment great Charlie Munger dislikes the Robinhood (for encouraging frequent trading, basically make it more like a lottery or gamble). But for me personally no trading fees plus some trading that has a purpose or a theme works better for me (I hold a stock from a few days to a few months on Robinhood).
So in other words, if I’ve put the money from my three small 401k accounts into $NVDA or $TSLA stocks and hold them all this time, I would be an IRA multi-millionaires. But I am just happy with my turnaround and my S&P 500 index like performance. Expectations, expectations and expectations, are the key to happiness 🙂
