If I Were Starting in 2023, Here's How I'd Invest $10,000

I’ve been investing for about two decades now, and like most investors, I didn’t get everything right at first. And now, as a Certified Financial Planner®, one of the more common questions I hear is, “If you were starting from scratch today, what would you invest in?”

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If I Were Starting in 2023, Here’s How I’d Invest $10,000

Of course, there’s no one-size-fits-all answer. Different investors have different goals and risk tolerances, and the ideal way to start investing now that I’m in my 40s is significantly different from when I was in my 20s. But having said that, if I had $10,000 to start an investment portfolio today, here’s what I would do.

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Put your money in the right places

Putting your money in the right type of account is almost as important as what you invest in — almost.

With that in mind, if I were starting with $10,000 today, I would put as much as possible into an individual retirement account, or IRA. You have two basic choices, traditional or Roth, and here are the basic differences.

Traditional IRAs allow qualified savers to put away money on a tax-deferred basis, meaning that your contributions might qualify for a tax deduction. When you withdraw money from the account, such as in retirement, it will be treated as taxable income.

Roth IRAs have the opposite tax structure. You won’t get a tax break right away, but your eventual qualifying withdrawals will be 100% tax-free. Money in retirement accounts generally needs to be left alone until you turn 59 1/2 years old, but Roth IRAs allow for owners to withdraw their initial contributions at any time without penalty, making them smart choices for savers who don’t want their money tied up.

In both types of IRAs, you can invest in any stocks, bonds, ETFs, or mutual funds you want, and the money can grow and compound on a tax-deferred basis. The 2023 IRA contribution limit is $6,000, or $7,000 if you’re 50 or older. However, you can still make contributions for 2022 until the April tax deadline, so if you don’t have an IRA yet and want to invest $10,000 right now, it may be possible.

Put some of your money on autopilot

I’m a fan of investing in individual stocks (I own 48 of them), but I’m also a fan of using passive-investment vehicles like index funds to form a solid foundation. Just to name a few top picks that I would use if I were starting from scratch:

Vanguard S&P 500 ETF (NYSEMKT: VOO): This ETF tracks the benchmark S&P 500 index, which has historically averaged returns of 9% to 10% per year and isn’t too reliant on any individual company’s performance.

Vanguard Real Estate ETF (NYSEMKT: VNQ): Real estate stocks have historically produced long-term returns on par with the S&P 500, but with generally lower volatility. Plus, real estate and general stock market performance doesn’t always move in the same direction, so this could be a great way to diversify.

Invesco QQQ ETF (NASDAQ: QQQ): This is the largest benchmark Nasdaq ETF and could be a good choice for investors who want outsized tech sector exposure, but without the volatility of individual tech stocks.

If I were starting today, I’d put about half of my money into passive index funds like these before deciding on any individual stocks to buy. But that’s me. Your ideal ETF exposure might be significantly smaller or larger than half of your portfolio, depending on your specific goals and risk tolerance.

Buy some excellent starter stocks

Finally, after allocating about half of my $10,000 bankroll to passive ETFs, I’d take the other half and form a portfolio of “starter stocks.” These are established, well-run businesses that aren’t likely to run into any serious trouble, but still have lots of room to grow.

Amazon (NASDAQ: AMZN) is a great example. It’s difficult to imagine a world without Amazon playing a major role, and there is plenty of room to grow on both the e-commerce and cloud services sides of the business.

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is another example, with a business model designed to generate market-beating returns while remaining recession resistant, and the track record to back it up.

Of course, these are just two examples, and there are many other possibilities.

Plan for the next steps

You may have been expecting some more exciting advice, but the point is that when you’re first getting started, the goal should be to establish a rock-solid foundation, as described here. Once you’ve done this, future investment dollars can be used to build out your portfolio with high-potential businesses you believe in, but when the market gets rough, you’ll be glad you’ve built a sturdy foundation.


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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matthew Frankel, CFP® has positions in Amazon.com and Berkshire Hathaway. The Motley Fool has positions in and recommends Amazon.com, Berkshire Hathaway, Vanguard S&P 500 ETF, and Vanguard Specialized Funds – Vanguard Real Estate ETF. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool has a disclosure policy.

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