At 35 I should know more about my Roth IRA than I do, but am risk-averse and worried about retirement

If you’re 35 and growing a bit anxious about the prospect of retirement, do not fret as many Millennials, some of whom are living paycheck to paycheck and burdened by student loans, aren’t even yet in the position to think about the distant prospect of retirement. Indeed, retirement is a marathon, not a sprint. And the sooner one gets started, the better.

Seeing as 35 is still incredibly young, I’d argue that there’s really no need to worry about retirement. In fact, such energy ought to be directed towards saving and investing as much as possible. And with the stock market exhibiting increased volatility over tariff uncertainties, I’d argue there’s never been a better time to keep investing for one’s future. 

In the case of this 35-year-old Reddit user, they’re looking to grow their Roth IRA. And while stocks are the answer for young investors seeking long-term growth, they are self-admittedly “risk-averse.” That said, they are seeking to find the right balance between growth and stability.

Growing one’s retirement nest egg at the young age of 35 with a “balanced” approach.

Indeed, just because young investors can take risks in stocks doesn’t mean they are willingness to do so. In any case, I think the Reddit user is on the right track. Having a glimpse at their portfolio, I’d say they’re not all too risk-averse, with a stock portfolio that has a fair amount of exposure to tech stocks — think Amazon (NASDAQ:AMZN), C3.ai (NASDAQ:AI), Accenture (NASDAQ:ACN) and Adobe (NASDAQ:ADBE) among other names. 

Arguably, this Reddit user seems to be on the right track. Their goal to achieve balance between growth and relative stability has nudged them to avoid all the red-hot stocks that many other Millennial investors have been chasing of late. Indeed, whether we’re talking about Nvidia (NASDAQ:NVDA) or Palantir (NASDAQ:PLTR), which are in free-fall mode right now, this 35-year-old seems to know their risk tolerance well and they’re not willing to step outside of it to chase what’s hot.

Checking out passive index ETFs could prove wise for a better balance

All considered, I think the 35-year-old is on the right track. However, for a more well-rounded portfolio that aims to optimize the growth-to-stability balance, I’d suggest trimming the tech exposure and adding to a position in an index fund, such as the Vanguard Total Stock Market Index Fund ETF (NYSARCA:VTI).

Indeed, the VTI makes it all too easy to diversify across the broad U.S. stock market. And while passive ETF investing isn’t as fun and exciting as picking and choosing your own stocks, I do think that stock pickers must be careful that they’re not leaning too heavily in more-volatile sectors of the market. Indeed, it’s not hard to imagine that many young growth investors are too heavy in the tech names.

Feeling pained by the latest market dip? It’s probably time to rebalance.

With the tech-heavy Nasdaq 100 in correction (a 10% drop from peak to trough), such tech-heavy investors are likely feeling added pains in a market sell-off that’s dragged the VTI down by just over 6%.

Indeed, if this latest market slip has one’s portfolio crashing rather than merely correcting, perhaps it’s time to re-evaluate how much risk one is taking on and whether it makes sense to “stabilize” with a stock in the healthcare, consumer staple or utility sector.

The Utilities Select Sector SPDR Fund (NYSEARCA:XLU) and The Health Care Select SPDR Fund (NYSEARCA:XLV) are two interesting picks with betas of 0.73 and 0.64, respectively, at the time of writing.

For someone who’s looking to skew towards stability rather than growth amid the latest market sell-off, the two ETFs could act as great stabilizers. Furthermore, the 1.54% and 2.83% yields, provided by the XLV and XLU, are a nice added bonus that stand to add further stability.

The bottom line

More young investors should aim to find their right balance of growth and stability. If the market sell-off has you rattled, rebalancing and consulting a financial advisor seems like a smart move to navigate the hurricane of tariff jitters better.

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