I have a min/max gaming brain and although from a sort of parenting point of view you can tell a younger person to go ahead and make your mistakes early in life, my math brain kicks in and actually says “go ahead, but the mistakes you make early on truly may become the biggest mistakes you ever make in your entire investment career, just that you have enough years to iron it out”.
So when young folks want to play games with their investments and earn their lumps, is it overall true to still say because of compound growth, understanding series of return risk, etc, that mentally and emotionally and human development wise sure it’s okay to make these mistakes but from a true mathematical bottom line investment POV that these mistakes truly can be the most material mistakes in their investment career?
And isn’t it also the case that if someone invested rather aggressively or followed or beat S&P earlier in their career and then significantly slowed down and did a lot of bonds. Even if their latest YoY performance shows absolutely tepid performance from a high bond allocation compared to someone else that can brag about 30% or 50% gains in the last year, if the person that got 30 or 50% wasn’t doing it yoy for their entire life and be the richest person on the planet it is way more likely that the person that has the bonds is just overall way ahead?
And given retirement investment contribution caps it seems a defining performance characteristic between different folks will be the level of employer match one gets as well as investment choices (I.e. I have full blown 401k brokerage link enabled ROTH options which lets me skip entirely). So as long as most people get a good enough income to max their retirement. As long as they can do this early, and their employer provides a match and generous options of retirement vehicles such as ROTH, those may actually be retirement defining boosts that differentiate retirement performance between most folks?
I’m 46 now and my balances look decent with a good mix of ROTH but my ability to track lifetime investment performance heavily falls off due to old dementia brain and the fact that no brokerages truly track performance for you past the legislative requirements to do so.