For decades, mainstream advice for long-term investors has been pretty boring: a 60/40 split between diversified stocks and bonds. And while this method isn’t necessarily “broken,” recent events have got a lot of people second-guessing a $10,000 allocation.
Understandably, with a stock market that keeps hitting all-time highs — and never-ending headlines warning of an AI bubble — it doesn’t feel like a smart move in a mid-euphoric rally.
Must Read
-
Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one
-
Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here’s what it is and 3 simple steps to fix it ASAP
-
The tax breaks in Trump’s ‘big beautiful bill’ expire after 2028. Here are 4 moves to make before the window closes
On the other hand, bonds aren’t living up to their supposed reputation for stability. Despite the U.S. Treasury increasing its bond buyback program, yields keep hitting multi-year highs as the global selloff intensifies.
That begs the question: What’s the wisest thing to do if you have $10,000 on the side ready to invest?
First off, a bit of context. Data from RBC Global Asset Management shows it’s statistically riskier not to invest in the market at all-time highs. After analyzing over 1,325 all-time highs for the S&P 500 since 1950, researchers found the chances of a severe market decline (10% or more) were about 9% one year later. Those odds decrease to 2% three years later and 0% after five years.
As for bonds, not every economist is losing their cool, at least not right now. As the financial research firm Capital Economics told The New York Times, “The recent sell-off in global government bond markets is significant, but it does not yet amount to a crisis.” If you believe geopolitics and macroeconomics will at least settle down in the long term, then bonds could actually be an attractive pickup today.
All that being said, let’s say you’re not sold on the idea that $10,000 in U.S. stocks and bonds is the best strategy. Luckily, there are plenty of attractive alternatives that might grow your wealth in this chaotic environment.
Semis, sapphires and water systems
Bloomberg recently scouted out wealth managers for their picks of the most tantalizing non-traditional ideas for a $10,000 investment. According to respondents, three options deserve a second look.
The first suggestion — South Korean stocks — isn’t exactly a secret. As the Asian epicenter for AI chipmakers, this nation has been in the news recently for the wild swings in its Korea Composite Stock Price Index (KOSPI).
