r/investing
Value or Growth Investing
Medical resident asks how to use fun money for fundamental analysis and healthcare/AI stocks while holding VOO for retirement.
- Consistent monthly investing in broad index funds like VOO is a proven strategy for long-term retirement planning.
- Learning fundamental analysis, cash flows, and balance sheets provides a strong educational foundation for stock picking.
- Forex day trading is perceived as gambling rather than a proven, reliable investment method.
So im a medical resident with 2 years left and been investing in VOO since college. I have about 15k in it and plan to invest 3-4k a month of my monthly income once I finish residency until retirement. My main priorrity after finishing residency will be to aggresively pay off student loans.
I know this may be frowned upon here but I also set aside some money as "fun money." Stuff to invest in like up and coming stocks, swing trading forex. Money I am 100% comfortable losing.
At the same time, I don't want to just gamble. For the "fun money," what's the smartest way to go about it? I did an MBA and my favorite part was economics and accounting! I loved going through cash flows/balance statements and analyzing stocks. We did a stock simulator class and it was amazing.
My main question is that with my "fun money," is it a good idea to go invest in healthcare stocks/AI stocks that potentially are growth or value stocks? I won't have the actual capital for a few years but if it is something worth my time, I want to spend my spare time learning fundamental analysis since it's enjoyable to me anyway.
I went down the Forex day trading rabbit hole but It seems more like gambling to me than proven methods
Honestly, if you already enjoy digging through financials, learning fundamental analysis is probably a much better use of your "fun money" than trying to day trade forex.
One thing I'd keep in mind is that healthcare and AI aren't investment theses by themselves. There are great businesses and terrible businesses in both. The interesting part is figuring out whether the market is pricing them reasonably relative to their cash flows, growth prospects, and risks.
Also, with your career trajectory, your biggest financial lever over the next decade is likely going to be your physician income, not whether a side account beats the market by a few percent. That makes it easier to treat stock picking as a hobby that might outperform, rather than something you need to outperform.
Nothing wrong with keeping the core in VOO and using a small allocation to learn by analyzing individual companies. That seems a lot more durable than chasing forex signals.
INTU is very solid company with good buy zone right now.
My “fun” money is in health and tech ETFs:
WQTM Quantum
LFSC Biotech
AIS AI
BAI AI
Growth with value tilt. How's that?
Whether it ends up tilted toward growth or value often depends less on a fixed plan and more on which companies' numbers actually hold your attention when you dig in.
Well value investing won’t give you the dopamine you are looking for. It’s a lifetime commitment thing. For what you want I suggest momentum investing. Strong factor. Lots of dopamine. Likely outperforms VT and chill by a few % per year
The dream is to buy value and have it turn to growth. But most people don’t see it coming.
I have no shame in investing in growth ETFs. Is basically them doing a momentum play for you.
If you want to be in both growth and value look into spmo/xmmo/xsmo and vflo/avlv/avuv
It depends on the economic environment. In a higher interest rate environment, value stocks tend to perform better than growth
Facts there BMY and IBM are not fun.
Looking for a proven method? Index funds. Three fund portfolio. Why doesn't everyone just do this? Because most people don't want to get rich slowly (paraphrasing a Warren Buffett quote)
Growth and value don’t mean what most people think they do. They refer to where a company is in its life cycle, and a company can switch from growth to value, back to growth etc.
Growth stocks don’t necessarily do better than value stocks. Recently sure but if you go back decades value stocks tend to do better.
You should own both.
both
Academic literature says that Value is better then growth but your really better off going for more of the Fama French factors like profitability and small cap. This gets out of buying companies that are cheap for a reason, and small for a reason.
If you really want to do the smart money thing with this then dig in deep on the Fama French model and find companies that conform to that thesis. You can use the stocks in AVUV as a starting point as that is a fund that follows these principles.