From Bitcoin to AI, How 6 Financial Advisors Would Personally Invest $1000

Have you ever wondered what you would do with an extra $1,000 if you could do whatever you wanted with it? What about what financial advisors would do with it? “Fun money should be used for just that—invest in something that motivates you to pursue something you value or believe in,” says Brent Weiss, Certified Financial Planner, Co-Founder and Head of Financial Wellness at Facet. We asked six financial advisors this question: If you personally came into a new $1,000, how would you invest it. Here’s what they told us. (Looking for a new financial advisor? This tool can match you with an advisor who meets your needs.)

Generative AI, says Reese Harper, certified financial planner and CEO of financial planning technology company Elements

“I definitely want to look at generative AI,” says Harper. It includes “all companies making serious investments in vertical software, targeting a specific industry, large language models to help scale efficiency across a very common task or function.”

Defensive sector stocks, says Nicholas Bunio, certified financial planner, Retirement Wealth Advisors

“I would invest it in a defense sector stock, like Lockheed Martin,” says Bunio, referring to Bethesda, Maryland-based aerospace, arms, defense and technology companies. “With the war in Ukraine, our weapons stocks are running low and a large amount of reordering is required. Plus, companies like this are more stable than a high-flying stock – and business should continue to pick up with war and tensions in China.”

Bitcoin and the ARK Innovation ETF, says Brent Weiss, Certified Financial Planner, Co-Founder and Head of Financial Wellness at Facet

“I would split it 50/50 between Bitcoin and the ARK Innovation ETF,” Weiss says, adding that he still likes the cryptocurrency “because I believe in the revolutionary possibilities of the underlying technology and the prospect of a distributed and decentralized world,” and adding that “it will either take off or literally come full circle and drop to a price that might only allow me to buy one pizza.”

When it comes to the ARK fund, an actively managed exchange-traded fund managed by asset management phenom Cathie Wood, Weiss says he personally likes “the focus on companies developing innovative technologies that can change the way we live.”

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Double long-term goals, several advisers say.

For his part, Caleb Pepperday, certified financial planner at JFS Wealth Advisors will also focus on the long term. “In the grand scheme of things, investing $1,000 won’t have a huge impact on many individuals’ financial plans,” says Pepperday, adding that “going all-in on a specific company with your fun money can quickly turn into gambling instead than investing.”

Instead, he says he would “look for the long-term benefit of investing in a vehicle that can provide tax benefits while also increasing in value.” Pepperday adds that he can “contribute that money to a Roth IRA so it grows tax-free over my lifetime,” adding that “if that $1,000 grows to $10,000 and I’m in the 22% fed tax bracket” and finally “gains an extra $1,980 by not having to pay Fed taxes on the money earned.

As for actually investing the excess funds, Pepperday says he “would look for a low-cost, broad-based index fund and make sure it has international exposure. Over the last five to 10 years, we haven’t seen international investments perform like good, but so far this year we have seen things turn around and international shares have added value.”

Anthony Colancecco, certified financial planner at Ballentine Capital Advisors, says with that $1,000, he’ll likely focus on his long-term goals, too. Because “certain factors have historically been shown to outperform over long periods of time,” – for example, “stocks outperform bonds, value stocks outperform growth, and small-caps tend to outperform large-caps,” – says Colancecco “this investment style is not to bet the farm on a single stock or asset class, but takes the passive indexing approach and adds layers of financial science to seek higher expected returns throughout the portfolio.”

US growth stocks and developed and emerging markets, says Chris Lyman, Certified Financial Planner, Allied Financial Advisors.

Like Pepperday and Colancesso, Lyman says that if it were his own personal money, he would probably “just invest for the long term,” adding that “if it’s money that I think I might need in the next five to seven years, I’m not going to invest it because I want to give the investment the best possible chance to make a profit.” That said, Lyman adds that he “personally looks at US growth stocks and developed/emerging international markets outside of Asia.”

Since major tech stocks had significant declines last year, Lyman says he believes “companies in that sector are in an excellent position going forward,” adding that “technology will continue to innovate, and these companies are bringing in so much money that they don’t it. has to rely so heavily on the financial markets to raise capital, which means they should be more insulated from the high interest rate environment we now have.” (Looking for a new financial advisor? This tool can match you with an advisor who meets your needs.)