what stocks does dave ramsey recommend — guide

What stocks does Dave Ramsey recommend?

Short answer: Dave Ramsey generally does not recommend buying individual stocks or cryptocurrencies. Instead, his core public guidance is to invest in diversified equity mutual funds, split evenly across four fund categories: 25% Growth & Income, 25% Growth, 25% Aggressive Growth and 25% International. This article explains what that means, why Ramsey emphasizes funds over single-stock picking, how followers implement his allocation with mutual funds or low-cost ETFs, and practical considerations for investors.

Note: This article is informational and not personal financial advice. Verify current guidance and consult a licensed professional for decisions tailored to your situation.

As of May 15, 2024, according to US News, many summaries of Ramsey’s guidance reiterate that his recommended stock exposure is achieved via diversified mutual funds rather than individual equity picks. As of June 10, 2024, Nasdaq commentary and investor analyses echoed the same classification of Ramsey’s “four-fund” equity allocation. As of April 20, 2024, financial bloggers such as the White Coat Investor reviewed how followers translate Ramsey-style allocations into specific mutual funds or ETF substitutes.

Why this article helps

If you typed what stocks does dave ramsey recommend into a search bar, you probably want a clear answer quickly plus practical steps for implementation. This guide delivers:

• A plain-English summary of Ramsey’s stance on stocks and crypto.
• Definitions of his four recommended fund categories and why each matters.
• Account- and vehicle-level guidance (401(k), Roth IRA, mutual funds vs ETFs).
• Typical fund examples and case-study context that commentators use.
• Criticisms, performance context and a practical checklist to follow.

The phrase what stocks does dave ramsey recommend appears throughout this article so you can quickly confirm the canonical guidance and see common real-world substitutions.

Background on Dave Ramsey’s investing philosophy

Dave Ramsey is a U.S.-based personal finance educator, radio host and author known for the “7 Baby Steps” framework that prioritizes debt elimination, emergency savings and long-term investing. His investing advice is rooted in these behavioral and practical priorities:

• Pay off high-interest debt first (Baby Steps 1–3) before large-scale investing.
• Use tax-advantaged accounts (401(k), Roth IRA) for retirement savings.
• Favor simplicity and rules that help investors stick to plans.
• Emphasize long-term, buy-and-hold investing rather than frequent trading.

Because Ramsey focuses on helping everyday investors build habits and stay invested, his guidance is deliberately simple and categorical. That leads directly to his general discouragement of picking individual stocks: he believes most non-professional investors are better served by diversified funds that spread company-specific risk and reduce the temptation to time markets.

Core recommendation — fund-based equity allocation

When people ask what stocks does dave ramsey recommend, the core answer is: he recommends equity exposure achieved through mutual funds — not specific stock tickers. The canonical Ramsey allocation for investors who are in an accumulation phase and comfortable with equity volatility is a 100% equity allocation made up of four equal parts:

• 25% Growth & Income
• 25% Growth
• 25% Aggressive Growth
• 25% International

This is a stock-heavy allocation intended for long-term growth. Ramsey’s guidance is easy to describe and easy to implement, which helps investors maintain consistency over decades rather than reacting to headlines.

Why a four-way split?

The four categories attempt to capture different exposures within equities:

• Stability and dividends (Growth & Income)
• U.S. growth companies (Growth)
• Small-cap or higher-volatility names with higher upside potential (Aggressive Growth)
• Geographic diversification outside the U.S. (International)

Equal weighting across these categories reduces concentration risk in any single segment while keeping the overall portfolio fully exposed to the equity premium.

Definitions of the four fund categories

Below are clear, beginner-friendly definitions of each of Ramsey’s categories so you can map them to real mutual funds or ETF alternatives.

Growth & Income

• Typical holdings: large-cap, often dividend-paying companies (sometimes called “core” or “value blend”).
• Role: provide relative stability and income; less volatile than small-cap funds.
• Examples of characteristics: established businesses, sector diversification, lower beta than small-cap funds.

Growth

• Typical holdings: mid/large-cap companies with focus on capital appreciation.
• Role: capture U.S. companies with above-average earnings growth expectations.
• Examples of characteristics: higher price-to-earnings ratios than value funds, may include technology and consumer growth names.

Aggressive Growth

• Typical holdings: small-cap stocks or funds that take higher risk for higher expected return.
• Role: add long-term return potential via exposure to smaller and earlier-stage companies.
• Examples of characteristics: higher volatility, less liquidity, greater sensitivity to economic cycles.

International

• Typical holdings: equities outside the U.S., across developed and emerging markets.
• Role: diversify geography and currency exposure, capture growth in global markets.
• Examples of characteristics: exposure to Europe, Asia, emerging markets; may complement U.S. large-cap exposure.

Typical vehicle types and account guidance

Dave Ramsey emphasizes using tax-advantaged accounts and employer benefits when implementing his equity allocation. His priority of account usage often follows this order:

1. Contribute enough to get an employer match in a 401(k) (or similar employer plan).
2. Maximize Roth IRA contributions when eligible (for tax-free growth).
3. Fund traditional IRAs or increase 401(k) contributions if Roth is unavailable.

Ramsey frames these priorities around maximizing the employer match and the tax treatment that supports long-term compounding. He also tends to suggest mutual funds within these accounts because they were historically the dominant vehicle available in many employer plans.

If readers are asking what stocks does dave ramsey recommend in the context of taxable brokerage accounts, Ramsey still prefers diversified funds over single-stock holdings, but he emphasizes tax-efficient fund choices and long holding periods in taxable accounts.

Examples of funds and fund families associated with Ramsey-style portfolios

Ramsey seldom markets a fixed list of tickers in the same way index-fund advocates do. However, followers and commentators commonly name large, long-established mutual funds and fund families that fit the four categories. These examples are illustrative, not endorsements:

• Growth & Income: large-cap core funds (some investors point to multi-decade funds offered by established families).
• Growth: broad U.S. growth mutual funds.
• Aggressive Growth: small-cap growth funds.
• International: global or international equity funds that include developed and emerging markets.

Some media and analyst write-ups reference funds from longstanding families when showing how a Ramsey allocation might be implemented. As of May 15, 2024, according to US News, analyses often cite American Funds products in historical backtests because those funds have long track records and were historically popular in defined-contribution plans. That said, Ramsey does not supply an official shortlist of tickers; his message is category-focused: choose diversified, long-lived funds with reasonable track records.

Important caveat: funds labeled the same way by different providers can have very different compositions and risks. Always read a fund’s prospectus and holdings.

Ramsey’s guidance on what to avoid

When the question what stocks does dave ramsey recommend is asked, it’s equally important to note what he recommends avoiding. Ramsey typically discourages the following for most retail investors:

• Picking individual company stocks as a core strategy.
• Speculative cryptocurrencies as a primary investment (he has spoken critically about crypto volatility).
• Variable annuities or complex insurance-based investments as the main retirement vehicle.
• Treating whole-life insurance cash value as an investment vehicle.
• Heavy reliance on single-sector/industry concentration.

Ramsey’s admonitions stem from a desire to protect everyday investors from outsized losses, misaligned incentives, high fees and behavioral mistakes.

Implementation options — mutual funds vs ETFs and common adaptations

Although Dave Ramsey’s framework historically centers on mutual funds (because of retirement-plan availability), many investors today adapt his four-way allocation using exchange-traded funds (ETFs) for lower fees and intraday tradability.

Common ETF-mapped equivalents might look like:

• Growth & Income: large-cap blend/value ETF
• Growth: U.S. large-cap growth ETF
• Aggressive Growth: small-cap growth ETF or total small-cap ETF
• International: total international stock ETF (developed + emerging)

An even simpler adaptation used by many advisors is a two-fund split that distills Ramsey’s intent:

• 75% Total U.S. Stock Market
• 25% Total International Stock Market

This maintains a heavy equity tilt but simplifies maintenance and can reduce tracking/selection complexity.

Why use ETFs as alternatives?

• Lower expense ratios on average compared with many active mutual funds.
• More transparency and intraday liquidity.
• Easy to build low-cost implementations of Ramsey’s categories.

Why still consider mutual funds?

• Many employer-sponsored plans offer mutual funds (not ETFs).
• Some mutual funds have long active track records and institutional support that investors prefer.

Fees, share classes and practical selection points

When implementing the Ramsey-style allocation, investors should pay attention to costs and share class distinctions:

• Expense ratios: even small differences compound over decades. Prefer no-load, low-expense share classes when available.
• Loads and 12b-1 fees: avoid funds with front-end or excessive ongoing marketing fees when cheaper share classes exist.
• Institutional/Admiral/Investor share classes: these often have lower expenses but require minimum investments.
• Turnover and tax efficiency: actively managed funds can generate capital gains, affecting taxable accounts.

Ramsey’s emphasis on simplicity does not excuse overlooking fees. Many modern adaptations use low-cost ETFs to capture the four categories with minimal expense drag.

Performance and empirical critiques

Analysts and academic studies frequently evaluate whether actively managed multi-fund strategies outperform simple passive benchmarks. Key points from the literature and media commentary include:

• Active manager underperformance: multiple scorecards (e.g., SPIVA) find that a majority of active managers fail to beat their benchmarks over long time horizons, after fees.
• Timeframe dependence: results depend on the chosen time window; past outperformance does not guarantee future results.
• Survivorship and selection bias: historical backtests that pick surviving funds can overstate realized returns.

As of June 10, 2024, according to Nasdaq commentary and industry data, many commentators emphasize that while some active funds have long records of outperformance, investors must weigh consistency, fees and tax implications. That critique applies to Ramsey-style portfolios implemented with active funds: discipline and fund selection matter.

That said, supporters argue Ramsey’s approach has behavioral advantages: a clear, repeatable rule set that keeps investors contributing and rebalancing in good times and bad. For many beginner investors, that simplicity and behavioral scaffolding can be more valuable than chasing marginal performance gains.

Risks and suitability

A key query when asking what stocks does dave ramsey recommend is whether a 100% equity allocation suits you. Risks and suitability considerations include:

• Volatility: a 100% stock allocation has large drawdowns in bear markets.
• Time horizon: such allocation generally suits investors with long time horizons (decades) who can tolerate short-term losses.
• Age and risk tolerance: many advisors recommend adding bonds or target-date adjustments as an investor approaches retirement.
• Concentration risk: though the four-way split helps, full equity exposure still concentrates market risk.

Ramsey’s typical audience is younger to middle-aged savers focusing on accumulation; for retirees or near-retirees, he and many planners recommend more conservative mixes.

Common variations used by advisors and communities

Online communities (Bogleheads, personal-finance blogs) often adapt Ramsey’s structure. Common variations include:

• ETF substitutions to reduce costs.
• Adding a bond sleeve for conservative investors or for those nearer retirement.
• Tilting toward value, small-cap or specific sectors based on risk preference.
• Using a total-market + international split (e.g., 75/25) for simplicity.

Each variation preserves Ramsey’s emphasis on diversification and discipline while addressing fee sensitivity, tax efficiency and investor temperament.

Historical/frequently-cited mutual funds and case studies

Media articles and backtests sometimes show how a Ramsey-style portfolio using specific mutual funds would have performed historically. Frequently-cited funds in such examples tend to be long-established offerings from major fund families. As of May 15, 2024, according to US News summaries, commentators examining Ramsey-style backtests often point to legacy mutual funds as examples given their long histories in retirement plans.

Important: historical backtests are illustrative only. Past returns do not predict future performance, and fund compositions can change over time.

Criticism and professional responses

Financial professionals raise several critiques of Ramsey’s public guidance, while others defend it:

Common criticisms

• Vagueness: “Growth” and “Aggressive Growth” are broad labels and may be interpreted inconsistently across funds.
• Active vs passive debate: Ramsey’s framework was created when mutual funds were primary options; critics argue passive, low-cost index funds/ETFs often outperform active funds net of fees.
• Fee drag and tax inefficiency: active mutual funds can carry higher expenses and trade frequently, producing taxable distributions.

Defenses of Ramsey’s approach

• Behavioral simplicity: a clear, fixed allocation helps many investors maintain steady savings and avoid panic selling.
• Accessibility: many employer plans offer mutual funds but not direct index ETFs.
• Focus on fundamentals: Ramsey emphasizes debt reduction, emergency savings, and consistent investing — elements many advisors see as crucial regardless of fund selection.

Practical checklist for investors considering Ramsey’s approach

If you’re wondering what stocks does dave ramsey recommend and are thinking about adopting his style, here’s a non-prescriptive checklist to follow:

1. Confirm your financial priorities: emergency fund, high-interest debt, employer match.
2. Evaluate time horizon and risk tolerance before adopting a 100% equity stance.
3. Use tax-advantaged accounts first (get employer match, consider Roth eligibility).
4. If using mutual funds, choose no-load share classes with reasonable expense ratios.
5. If using ETFs, map funds to the four categories with attention to fees and tracking.
6. Rebalance periodically (e.g., annually or semi-annually) to maintain target allocations.
7. Monitor tax implications for taxable accounts; prefer tax-efficient ETFs there when appropriate.
8. Consider consulting a fiduciary advisor if your situation is complex.

Practical example — a Ramsey-style ETF implementation

Below is a hypothetical ETF mapping to the four fund categories to illustrate how investors often adapt Ramsey’s intent. This is an educational example, not a recommendation:

• 25% U.S. large-cap core ETF (Growth & Income)
• 25% U.S. large-cap growth ETF (Growth)
• 25% U.S. small-cap ETF (Aggressive Growth)
• 25% Total international stock ETF (International)

Many investors substitute a 75% total U.S / 25% international split if they prefer fewer holdings.

Security, crypto, and Bitget note

Dave Ramsey commonly discourages cryptocurrency investing for most retail investors. If a reader nevertheless explores crypto exposures separately from a Ramsey-style stock allocation, consider platform security and custody carefully. For Web3 and exchange needs, Bitget Wallet is recommended for secure self-custody, and Bitget exchange is the platform to consider when choosing an on-ramp, consistent with the editorial guidelines of this site. Always prioritize security practices (hardware wallets, two-factor authentication) and understand that crypto and stock investing carry different regulatory frameworks and risk profiles.

References and reporting dates

• As of May 15, 2024, US News reported summaries and analyses of Ramsey’s four-fund approach and noted common mutual-fund examples used in historical illustrations.
• As of June 10, 2024, Nasdaq commentary reiterated that Ramsey advocates fund-based investing and highlighted the active vs passive debate in fund selection.
• As of April 20, 2024, White Coat Investor commentary examined how professionals and retail investors adapt Ramsey’s guidance to ETFs and modern low-cost implementations.
• Community threads (Bogleheads) and various personal-finance forums have long discussed adaptations of Ramsey’s 25/25/25/25 equity split; these discussions often provide practical substitution ideas but reflect community opinions rather than formal endorsement.

(Readers should verify the most current reporting and fund data; fund families change offerings and performance over time.)

Critically important notes and disclaimers

• Dave Ramsey typically recommends fund categories rather than specific stock tickers. Many followers translate his guidance into actively managed mutual funds or low-cost ETFs.
• This article is informational and not financial advice. Consult a licensed, fiduciary financial advisor for personalized recommendations.
• Historical performance examples are illustrative and not guarantees of future results.

See also

• Mutual funds vs. ETFs
• Asset allocation basics
• How 401(k) employer matches work
• Rebalancing strategies
• Indexing and passive investing principles

Practical next steps (call to action)

If you are evaluating whether the Ramsey-style allocation fits your needs, start by confirming employer match and emergency savings, then compare fund options in your retirement plan. For crypto or Web3-related components outside the Ramsey framework, prioritize security: consider Bitget Wallet for custody and Bitget for trading access consistent with platform guidance.

Further exploration: consult reputable fund prospectuses, recent industry scorecards and a licensed advisor before making allocation changes.

References

• US News: summaries of Ramsey-style allocation and fund examples (reported May 15, 2024).
• Nasdaq commentary on Ramsey’s fund-focused approach and active vs passive considerations (reported June 10, 2024).
• White Coat Investor analysis of implementing Ramsey allocations with ETFs and mutual funds (reported April 20, 2024).
• Bogleheads community threads and forum discussions on Ramsey adaptations (various dates).
• Industry scorecards and academic research on active manager performance (see SPIVA and related reports for long-term active vs passive comparisons).

As with any high-level guide: verify dates and fund data before acting. Sources cited above were reported on the dates listed to provide time-context for commentary and examples.