8 ms·

Well? What's a wiser choice? I know nothing about investing and only started making $ a few months ago so I'm curious what the alternatives are. Just put it in

by rublev 10y ago

Well? What's a wiser choice? I know nothing about investing and only started making $ a few months ago so I'm curious what the alternatives are. Just put it in ETF's, rebalance yearly, and wait 20 years?

kgwgk 10y ago
Keep your $ and wait. They won't go up but they won't go down. And when everything else goes down, you invest. (Of course this strategy is good only if everything is overvalued and goes down to fairly valued eventually.)
- dbancajas 10y ago
  how do you know the bottom of "down"? this is essentially timing the market. good if you are nostradamus i guess. not trying to be a dick here but am looking for average joe plumber advice here.
  - ianai 10y ago
    A wise professor once told me "once the last stalwart hold out has bought into the market the end is near". Once you're to the point where everyone is seemingly in the market and people that shouldn't be are in, too, you're probably in for a swing downward. The Feds aversion to raising rates is really telling.
  - kgwgk 10y ago
    You don't have to wait until the bottom, but it's obviously better to buy assets when they are "cheap" rather than "expensive". Valuation and long-term future returns seem indeed related historically https://www.oppenheimerfunds.com/private-client-groups/article/asset-allocation-through-the-business-cycle/valuation-is-a-limited-predictor-of-asset-returns https://www.oppenheimerfunds.com/private-client-groups/artic... For a more detailed treatment: https://personal.vanguard.com/pdf/s338.pdf https://personal.vanguard.com/pdf/s338.pdf Of course this kind of arguments are not bullet-proof, see for example: http://www.philosophicaleconomics.com/2014/06/critique/ http://www.philosophicaleconomics.com/2014/06/critique/ And one could have missed the last years of bull market applying these arguments already in 2013 (it doesn't mean that the conclusion was wrong with the 2023 horizon, though). Anyway, ignoring valuation completely doesn't seem the right thing to do and people try to forecast returns to make asset allocation decisions: https://www.researchaffiliates.com/en_us/asset-allocation.html https://www.researchaffiliates.com/en_us/asset-allocation.ht... I wouldn't call that market timing.
- rublev 10y ago
  Hold on, let me just grab my stopwatch and time the market.
  - kgwgk 10y ago
    You're right. TINA.
- mcintyre1994 10y ago
  What if "they won't go down" is untrue? Asking because my $ are GBP..
  - kgwgk 10y ago
    1 GBP = 1 GBP as far as I can tell... Prices of many other assets in GBP are going up, that's true. It's the movement of the other assets that is going against you.
ianai 10y ago
There are always inflation adjusted treasury bonds. There are also non stock based investment options, though harder to do.
- kcanini 10y ago
  The inflation-adjusted yield on those bonds is currently near 0%, and actually negative for short durations.
  - ianai 10y ago
    Isn't that the point? Risk=0 and all.
  - kcanini 10y ago
    > Isn't that the point? Risk=0 and all. Well, the short-term real returns are negative, and the long-term real returns will also be negative if the Fed ever raises interest rates in the next few decades. There is also good evidence that the official inflation rate is being artificially suppressed by the government, which means real returns are significantly lower across the board. So if you're holding this up as a decent alternative to buying equities, I think it falls pretty flat.
    - FabHK 10y ago
      I think there is no good evidence that the official inflation rate is being artificially suppressed by "the government". Krugman: "As it happened, there was a very easy answer to the inflation truthers: quite aside from the absurdity of claiming a conspiracy at the BLS, we had independent estimates such as the Billion Prices Index that closely matched official data." http://krugman.blogs.nytimes.com/2016/10/17/distrust-of-data/ http://krugman.blogs.nytimes.com/2016/10/17/distrust-of-data...
      - kcanini 10y ago
        Have you read this page? http://www.shadowstats.com/article/no-438-public-comment-on-inflation-measurement http://www.shadowstats.com/article/no-438-public-comment-on-...
unknown_apostle 10y ago
Well it looks to me like 1980 is a mirror of 201x. Low valuations vs super high valuations. Brash and hawkish central bankers vs anxious and dovish central bankers. 20% vs negative yields. Nobody even considering financial investments vs E-trade babies. Bruce Springsteen vs 20-something hedgies. Lowered debt (because of 60s and 70s inflation) vs record debt. Fear of inflation vs pining for inflation. Why not follow the analogy? In 1980 people were lining up for gold when they should have been buying stocks and paper. Why not put 5% of your savings in gold? Like coins or GLD or something.
- rublev 10y ago
  I haven't the faintest idea what your comment means and by the time I understand all this finance shit to even put together a comment like you did, I'll have given up all my hobbies and free time along with my job. Fuck I hate finance so much. Googling for like a year and I still haven't the faintest clue what to actually do with my money. Just going to keep it all in cash and call it a fucking day.
  - ianai 10y ago
    I just asssume they're no better than listening to "Mad Money" once they throw terms like doves and bulls around. I'd suggest you read actual books on personal finance and investment. For market stuff, 1929 the great crash by Galbraith would probably work as a crash course. Sorry for the pun. Edit- by "no better" I mean if I can get 80-100% of your content from a common source then I'm better sticking with the common source.
    - rublev 10y ago
      > I'd suggest you read actual books on personal finance and investment. Oh boy have I ever. And not a word was retained. Total gibberish. No idea how I can code but not understand finance. Honestly, I don't have the time to 'get into' finance beyond reading up a couple hours a week. Just need a simple guide, my only goal is to leave my money somewhere for 20 years and not touch it while it grows so I can make $20k/year off my investments eventually. Not looking to day trade or do any of that. Been looking at Canadian Couch Potato (I'm in Canada) and Mr Money Moustache. I don't have any lofty aspirations. I only want this apartment to be paid off for free every month, at which point I'll have the freedom to wake up every day and do whatever I want.

by rublev 10y ago

kgwgk 10y ago

Keep your $ and wait. They won't go up but they won't go down. And when everything else goes down, you invest. (Of course this strategy is good only if everything is overvalued and goes down to fairly valued eventually.)

dbancajas 10y ago
how do you know the bottom of "down"? this is essentially timing the market. good if you are nostradamus i guess. not trying to be a dick here but am looking for average joe plumber advice here.
- ianai 10y ago
  A wise professor once told me "once the last stalwart hold out has bought into the market the end is near". Once you're to the point where everyone is seemingly in the market and people that shouldn't be are in, too, you're probably in for a swing downward. The Feds aversion to raising rates is really telling.
- kgwgk 10y ago
  You don't have to wait until the bottom, but it's obviously better to buy assets when they are "cheap" rather than "expensive". Valuation and long-term future returns seem indeed related historically https://www.oppenheimerfunds.com/private-client-groups/article/asset-allocation-through-the-business-cycle/valuation-is-a-limited-predictor-of-asset-returns https://www.oppenheimerfunds.com/private-client-groups/artic... For a more detailed treatment: https://personal.vanguard.com/pdf/s338.pdf https://personal.vanguard.com/pdf/s338.pdf Of course this kind of arguments are not bullet-proof, see for example: http://www.philosophicaleconomics.com/2014/06/critique/ http://www.philosophicaleconomics.com/2014/06/critique/ And one could have missed the last years of bull market applying these arguments already in 2013 (it doesn't mean that the conclusion was wrong with the 2023 horizon, though). Anyway, ignoring valuation completely doesn't seem the right thing to do and people try to forecast returns to make asset allocation decisions: https://www.researchaffiliates.com/en_us/asset-allocation.html https://www.researchaffiliates.com/en_us/asset-allocation.ht... I wouldn't call that market timing.
rublev 10y ago
Hold on, let me just grab my stopwatch and time the market.
- kgwgk 10y ago
  You're right. TINA.
mcintyre1994 10y ago
What if "they won't go down" is untrue? Asking because my $ are GBP..
- kgwgk 10y ago
  1 GBP = 1 GBP as far as I can tell... Prices of many other assets in GBP are going up, that's true. It's the movement of the other assets that is going against you.

ianai 10y ago

There are always inflation adjusted treasury bonds. There are also non stock based investment options, though harder to do.

kcanini 10y ago
The inflation-adjusted yield on those bonds is currently near 0%, and actually negative for short durations.
- ianai 10y ago
  Isn't that the point? Risk=0 and all.
- kcanini 10y ago
  > Isn't that the point? Risk=0 and all. Well, the short-term real returns are negative, and the long-term real returns will also be negative if the Fed ever raises interest rates in the next few decades. There is also good evidence that the official inflation rate is being artificially suppressed by the government, which means real returns are significantly lower across the board. So if you're holding this up as a decent alternative to buying equities, I think it falls pretty flat.
  - FabHK 10y ago
    I think there is no good evidence that the official inflation rate is being artificially suppressed by "the government". Krugman: "As it happened, there was a very easy answer to the inflation truthers: quite aside from the absurdity of claiming a conspiracy at the BLS, we had independent estimates such as the Billion Prices Index that closely matched official data." http://krugman.blogs.nytimes.com/2016/10/17/distrust-of-data/ http://krugman.blogs.nytimes.com/2016/10/17/distrust-of-data...
    - kcanini 10y ago
      Have you read this page? http://www.shadowstats.com/article/no-438-public-comment-on-inflation-measurement http://www.shadowstats.com/article/no-438-public-comment-on-...

unknown_apostle 10y ago

Well it looks to me like 1980 is a mirror of 201x. Low valuations vs super high valuations. Brash and hawkish central bankers vs anxious and dovish central bankers. 20% vs negative yields. Nobody even considering financial investments vs E-trade babies. Bruce Springsteen vs 20-something hedgies. Lowered debt (because of 60s and 70s inflation) vs record debt. Fear of inflation vs pining for inflation. Why not follow the analogy? In 1980 people were lining up for gold when they should have been buying stocks and paper. Why not put 5% of your savings in gold? Like coins or GLD or something.

rublev 10y ago
I haven't the faintest idea what your comment means and by the time I understand all this finance shit to even put together a comment like you did, I'll have given up all my hobbies and free time along with my job. Fuck I hate finance so much. Googling for like a year and I still haven't the faintest clue what to actually do with my money. Just going to keep it all in cash and call it a fucking day.
- ianai 10y ago
  I just asssume they're no better than listening to "Mad Money" once they throw terms like doves and bulls around. I'd suggest you read actual books on personal finance and investment. For market stuff, 1929 the great crash by Galbraith would probably work as a crash course. Sorry for the pun. Edit- by "no better" I mean if I can get 80-100% of your content from a common source then I'm better sticking with the common source.
  - rublev 10y ago
    > I'd suggest you read actual books on personal finance and investment. Oh boy have I ever. And not a word was retained. Total gibberish. No idea how I can code but not understand finance. Honestly, I don't have the time to 'get into' finance beyond reading up a couple hours a week. Just need a simple guide, my only goal is to leave my money somewhere for 20 years and not touch it while it grows so I can make $20k/year off my investments eventually. Not looking to day trade or do any of that. Been looking at Canadian Couch Potato (I'm in Canada) and Mr Money Moustache. I don't have any lofty aspirations. I only want this apartment to be paid off for free every month, at which point I'll have the freedom to wake up every day and do whatever I want.