Quote History Originally Posted By VVinci:
I think the one aspect missed is that for someone like my 19 YO son, who only has a couple of k in his IRA, buying NVDA is too high risk, but he can participate a bit in NVDA if he believes in it via NVDY because he can afford 10-20 shares of that.
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I contend the exact opposite is true.
First, risk is a function of one’s investment horizon and in a teenager’s IRA, that horizon is several decades.
Granted, single or few (less than 11 or so) stock risk is higher, it won’t always be his only or almost only stock.
He has many decades for NVDA to grow and add other stocks along the way.
By way of “money where your mouth is”: I have owned NVDA for a long time; my original number of shares was tripled via stock splits and while it wasn’t my only stock, it has grown to one of my top five largest positions.
In reality, a smarter approach would be to just keep putting it into midcap ETF until he had enough to start effectively buying individual stocks.
Again, exactly what I did with my lawn mowing/landscaping money when I was a teenager: IRA, S&P500, never touched it, well into 6 figures today.