I don't like your strategy. Don't wait. Open an investment account today with a low cost providers and put those funds into a low cost investment that represents as much of the market as you can find.
I am going to start by assuming you are a really smart person. With that assumption I am going to assume you can see details and trends and read into the lines. As a computer programmer I am going to assume you are pretty task oriented, and that you look for optimal solutions.
Now I am going to ask you to step back. You are clearly very good at managing your money, but I believe you are over-thinking your opportunity.
Reading your question, you need a starting place (and some managed expectations), so here is your plan:
- Don't carry unsecured debt DONE
- Have a budget and spend less than you earn DONE
- Create an emergency fund DONE (to excess)
- Take advantage of any matching retirement funds you might have at work
- Create a personal retirement account with a low cost provider (Roth or Traditional IRA)
- Every paycheck, starting as soon as you can, put some money into the retirement account
- As your budget allows, increase your retirement contributions to max allowed by law
Now that you have a personal retirement account (IRA, Roth IRA, MyRA?) and perhaps a 401(k) (or equivalent) at work, you can start to select which investments go into that account. I know that was your question, but things you said in your question made me wonder if you had all of that clear in your head.
The key point here is don't wait.
You won't be able to time the market; certainly not consistently. Get in NOW and stay in. You adjust your investments based on your risk tolerance as you age, and you adjust your investments based on your wealth and needs. But get in NOW.
Over the course of 40 years you are likely to be working, sometimes the market will be up, and sometimes the market will be down; but keep buying in. Because every day you are in, you money can grow; and over 40 years the chances that you will grow substantially is pretty high. No need to wait, start growing today.
Things I didn't discuss but are important to you:
- Are you a saver or investor?
- Your goals (car, travel, house, extended education, family?)
- You will want to save some, invest some, be charitable with some, and spend some of your money. You'll have to figure out the proportions.
- Eligibility for various retirement accounts
- What you should invest in (which is what you asked, but the exposition of your question made me tell you all this)
- Investing outside of a retirement account
- Evaluating the cost of an investing in your account
- Technical investors believe you can time the market; I don't. But you can find their opinions and ideas on this site as well. I'd suggest reading both to help you decide
- As long as we are talking opinions, I also believe the US will be a going concern in 40 years and our markets will not have collapsed.
- My personal plan is just as I described. I don't pick stocks or watch the markets. I use target retirement investments and let somebody else worry about re-balancing, value investing and tax advantaged investments.