- CNBC’s Jim Cramer offered advice on how to best invest as you age.
- “It’s your life, not mine,” he said. “So get used to what you can live with. But risk should remain a friend, at least until your middle years.”
CNBC’s Jim Cramer emphasized that investment goals can change as you get older. The older you get, the less risk you can take, he said.
But while he said he thinks it’s a good idea for investors to have a mix of index funds and individual stocks, Cramer’s rule for those just out of college is that they should put their first major chunk of savings into an index fund . The possibility of a bad stock hurting your nest egg in your 20s is too risky, he said.
“The risk of individual stocks is too great to simply put together a portfolio of names of your choice,” he said. “So at a minimum, I demand that you put your first ten grand in savings from your first job into an index fund, with the S&P 500 being my favorite.”
As you get older, Cramer suggests curating a diversified stock portfolio. However, he advised not to invest in fixed income assets until one’s 30s or 40s and to do so gradually even then.
Above all, Cramer emphasized that only you can decide how much risk you want to take, adding that you should always ask yourself what you would do in a sell-off.
“It’s your life, not mine,” he said. “So get used to what you can live with. But risk should remain a friend, at least until your middle years.”
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