How long have you averaged 20% per year? How many business cycles? It has been easy to be an equity investor for the last decade, but sustaining these returns over more than a decade would put you in the top few money managers worldwide.
I started investing 5 years ago with real money and won virtual investing competitions for the 2 years before that where the goal was to produce the highest portfolio values within a given set of time. I don’t remember how high I placed but I got a pretty ornamental gift certificate which inspired me to continue further. Other investors would read charts like they would tea leaves but my strategy was to find stocks trading below their company valuation with above average growth prospects. These prospects have a lower risk and have a higher potential reward.
At one point in my career, I downloaded the data for all 3000+ stocks into a MySQL DB to learn which metrics mattered the most and which mattered the least... and the results were surprising.
That 20% I quoted is from a stock and ETF retirement account. In a non-retirement account that had also grown quite a lot over the years, I allocated a conservative 20% of my portfolio to call options and that account is up 177% overall this year. But options aren’t something you try until you have years of experience, comfort, and knowledge with stocks.
Finally, I know the theme on HN is to disagree, counter, and dispute whatever the previous comment said but I’d like to receive some support if I’m going to continue posting.
I’ve been much lazier about stock selection after selling a bunch to buy a house this year but I’ve been invested in ARKK for 4 years and expect to continue being invested with them for the next 4 years. Looking forward to capture their juicy Christmas dividend. I also like Apple and Target stock as a solid portfolio bedrock.
For the OP, having 1M is a great position to be in but also a two edged sword: you have the money but investing it all at once is psychologically hard. I saw an article on Seeking Alpha with an example portfolio for retirement that I generally agree with, you can take a look at it here: https://seekingalpha.com/article/4391859-retirement-portfoli...