3 ms·

Wouldn't it be a better idea to invest in bonds or more stable sources of investment for the next few years until we can make sure of the impact of Brexit-Trump

by mFixman 10y ago

Wouldn't it be a better idea to invest in bonds or more stable sources of investment for the next few years until we can make sure of the impact of Brexit-Trump? I wouldn't be surprised if AAPL and other giant third sector companies fall in value right now.

mathgeek 10y ago
In investing terms, you're talking about a "less risky" rather than "better" idea. You'll only know if something was better after the event in question has passed. Passive investing when you have many years before retirement means you worry about long term trends rather than short term risks.
mxschumacher 10y ago
while coupons (e.g. the regular payout) might be stable, bonds, too, can fall in value. One interest rate hike by the FED or ECB would send bond prices tumbling.
matwood 10y ago
You're talking about market timing which is incredibly hard (some say impossible) to do over a long period of time. Sure, you might miss the down here (if there is one), but then you also might miss the move back up. There is a saying that time in market is much better than timing the market. If you consistently put money in, you'll naturally also buy the downs. At that point, you just need to periodically rebalance, and with age start to shift to less risky investments.
twic 10y ago
Ah, you see, because the market is famously perfectly efficient, equity and bond markets have already priced in the expected effect of Brexit-Trump. So investing in equities now essentially gets you a discount over what they would have cost had Brexit-Trump not happened. Whereas (more seriously) investing in "more stable" things like bonds forces you to pay a premium, because every man and his dog has desperately been chasing stability, safety, yield, etc since 2008, in many cases using quantitatively eased money to do so.
gragas 10y ago
I hope you do that. That way you'll be able to quantify your liberal hubris.
- yequalsx 10y ago
  How is the comment you replied to liberal hubris? There is uncertainty with regard to Britain voting to leave the EU. Since the U.S. election the bond market in the U.S. has fallen quite a bit. This is unusual given that the only new information comes from the election. Clearly there are impacts from the election that an average person wouldn't be aware of. Hence the comment about adopting a wait and see attitude. While this may not be a good strategy it hardly qualifies, necessarily, as liberal hubris.
- dang 10y ago
  > liberal hubris When a thread takes a turn for the worse, please don't reply unless you can make it better, not worse still. Political name-calling makes it worse still. Since I had to ask you to keep partisan politics out of HN threads only a couple days ago, I'd like to emphasize the point. This is not what Hacker News is for. Please (re)-read: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html

by mFixman 10y ago

mathgeek 10y ago

In investing terms, you're talking about a "less risky" rather than "better" idea. You'll only know if something was better after the event in question has passed. Passive investing when you have many years before retirement means you worry about long term trends rather than short term risks.

mxschumacher 10y ago

while coupons (e.g. the regular payout) might be stable, bonds, too, can fall in value. One interest rate hike by the FED or ECB would send bond prices tumbling.

matwood 10y ago

You're talking about market timing which is incredibly hard (some say impossible) to do over a long period of time. Sure, you might miss the down here (if there is one), but then you also might miss the move back up. There is a saying that time in market is much better than timing the market. If you consistently put money in, you'll naturally also buy the downs. At that point, you just need to periodically rebalance, and with age start to shift to less risky investments.

twic 10y ago

Ah, you see, because the market is famously perfectly efficient, equity and bond markets have already priced in the expected effect of Brexit-Trump. So investing in equities now essentially gets you a discount over what they would have cost had Brexit-Trump not happened. Whereas (more seriously) investing in "more stable" things like bonds forces you to pay a premium, because every man and his dog has desperately been chasing stability, safety, yield, etc since 2008, in many cases using quantitatively eased money to do so.

gragas 10y ago

I hope you do that. That way you'll be able to quantify your liberal hubris.

yequalsx 10y ago
How is the comment you replied to liberal hubris? There is uncertainty with regard to Britain voting to leave the EU. Since the U.S. election the bond market in the U.S. has fallen quite a bit. This is unusual given that the only new information comes from the election. Clearly there are impacts from the election that an average person wouldn't be aware of. Hence the comment about adopting a wait and see attitude. While this may not be a good strategy it hardly qualifies, necessarily, as liberal hubris.
dang 10y ago
> liberal hubris When a thread takes a turn for the worse, please don't reply unless you can make it better, not worse still. Political name-calling makes it worse still. Since I had to ask you to keep partisan politics out of HN threads only a couple days ago, I'd like to emphasize the point. This is not what Hacker News is for. Please (re)-read: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html