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This is the ‘biggest mistake’ young investors make, Josh Brown says

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10 months ago

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Josh Brown.

Danielle DeVries | CNBC

Investing can feel daunting for newbies.

About 21% of surveyed Americans say stocks aren’t their preferred way to invest because the stock market is too intimidating, according to a Bankrate poll in January. That fear skewed higher for younger people, to 29% of Gen Z members and 24% of millennials, it found.

Putting all your money in cash or bonds may feel safe, because it seems like there’s little scope for financial loss — but this is misguided, according to financial advisors.

“When you’re young, worrying more about downside than upside is probably the biggest mistake,” said Josh Brown, CEO of Ritholtz Wealth Management. “You have to get rich before you focus on preserving your wealth.”

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In fact, young people shouldn’t be focused at all on cash positions or bonds in their investment accounts, Brown said. Instead, they should be fully invested in the stock market, he said.

Young investors have time on their side

It may seem counterintuitive that stocks are generally the safer route for young investors when it comes to building long-term financial security.

While stocks are generally more volatile than cash and bonds, stocks have also historically outperformed them over long periods — an important factor when it comes to growing wealth and beating inflation, which erodes the value of money over time, experts said.

The S&P 500, an index of the largest U.S. stocks, had an average annual return of almost 12%, including dividends, from 1928 through 2024, according to data compiled by Aswath Damodaran, a finance professor at New York University.

By comparison, 10-year U.S. Treasury bonds and corporate bonds had an average annual return of about 5% and 7% over the same period, respectively, the data shows.

Investors in their 20s and 30s have decades ahead of them for interest to compound and recoup any near-term financial losses from stocks.

“When you’re a young investor, you have something at your disposal that every professional investor dreams that they can have, which is more time,” Brown said.

“When you appreciate how much time you have, you recognize the benefit of long-term compounding,” he said. “Even though you think you’re taking more risk by buying and holding [stocks], you’re actually taking less risk.”

How to buy and hold stocks

Fajrul Islam | Moment | Getty Images

Buying and holding stocks is just one part of the equation — how investors hold them matters a lot, too.

Investors who are just starting out are generally best served by owning an index fund that tracks the broad stock market, instead of trying to pick individual company stocks that they or analysts think will perform well. The latter strategy is risky, since investors peg their financial outcomes to the success of a handful of stocks.

Index mutual funds and exchange-traded funds hold a basket of hundreds of stocks that track the broad market. Index funds have historically outperformed most stock pickers over long stretches of time and take a lot of the complexity out of investing, experts said.

“If you’re going to be self-directed and you’re going to do it yourself, I would utilize index [mutual] funds and index ETFs,” Brown said. “And until you’ve got six figures of pure stock market exposure at a low cost, there’s really nothing else worth talking about.”

Young investors can start out with a total market index fund, said Christine Benz, director of personal finance and retirement planning for Morningstar.

An all-stock index fund that provides U.S. and non-U.S. stock exposure, such as the Vanguard Total World Stock ETF (VT), is a good “one-and-done fund” for young investors, she said.

A balanced fund or target-date fund may also work well, she said.

Balanced funds maintain a static asset allocation — that is, the relative mix of assets such as stocks and bonds — over time. A target-date fund is similar, but gradually winds down its stock exposure as investors age.

Investors should be mindful of the type of account in which they hold their assets, advisors said. For example, it may make more sense to hold certain funds such as a target-date fund in a tax-advantaged retirement account such as a 401(k) or IRA instead of a taxable brokerage account, a type of non-retirement account, to prevent an unexpected tax bill at year-end.

This article is part of CNBC’s Let’s Get Personal (Finance) video series. Check out the full lineup of videos to help you make smarter money decisions on YouTube.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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