Best way to invest $10k for long-term growth?

Hello!

Investing your $10k wisely is a great decision for long-term growth. Considering your interest in a strategy that isn’t too hands-on, yet allows you to make informed choices, there are several options you might consider:

1. Exchange-Traded Funds (ETFs): ETFs are a popular choice because they offer diversification across various assets, are cost-effective, and are easy to trade like stocks. They track an index, a commodity, bonds, or a basket of assets. For someone looking for long-term growth with managed risk, investing in a broad market ETF or a set of ETFs covering different sectors or regions could be a strategic move.

2. Managed Funds: These are funds managed by professionals who allocate your money across different assets. Managed funds can offer diversification and professional management, reducing the burden of making day-to-day investment decisions. However, they typically come with higher fees than ETFs, which could affect your long-term returns.

3. Stocks: Directly investing in stocks allows you to choose companies that you believe will perform well over the long term. This requires more research and a higher tolerance for risk, as individual stocks can be more volatile than ETFs or managed funds.

4. Bonds: If you’re looking for lower-risk investments, consider bonds. They provide regular income through interest payments and are generally considered safer than stocks. However, the returns might be lower, especially in a low-interest-rate environment.

5. Real Estate Investment Trusts (REITs): For those interested in real estate, REITs offer a way to invest in property without having to buy physical real estate. They often provide good dividends, making them attractive for long-term growth and income.

Regarding the strategy of investing your lump sum, dollar-cost averaging (DCA) is a technique worth considering. Th

Show more.....

Hi Diego, and welcome :)

In my personal view, for a set and forget long term investment, you want to lean towards a few things: low fees (say under 0.2% management fees), something diversified (hundreds/thousands of companies), and something simple to understand which you can ideally add more savings to over time.

Most people in this community go for things like index funds, which typically meet the above criteria and are relatively hassle-free. I’ve written about these vehicles in the following articles and why they work for me personally.

https://strongmoneyaustralia.com/my-changing-...
https://strongmoneyaustralia.com/guide-to-inv...
https://strongmoneyaustralia.com/dhhf-vdhg-on...

But I would encourage you to do some more reading about different options and figure out what makes sense to you, because others will have different opinions.

All the best

For friends who’ve asked me the same question, I usually recommend VESG because it has a fair bit of diversity, low fees, and screens out a fair number of ‘unethical’ companies (which depends on your ethics, but meg). Any global Vanguard fund should be fine (e.g., VGS, VTS, VDHG) and it’s more important to do something rather than put it off forever, and you can buy other index fund ETFs down the track if you want to change it up. One thing to consider is you do have to put some extra numbers on your tax return, but if you wait for the ATO to prefill the data it’s pretty easy. The Barefoot Investor recommends AFI as the first share to start with (or at least, he used to), which is Australian based and pays regular dividends, so is also good to get a feel for investment (but has higher mangement and I think might be more conservatively run than a pure index fund). So basically, I’d put it all in an index fund like VESG, and don’t worry if the price goes down in the short term because it’s a long term investment.