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The argument of the OP almost exactly fits this lead in to the article: > I hear some version of this argument all the time: The opportunity cost for holding

The argument of the OP almost exactly fits this lead in to the article: > I hear some version of this argument all the time: The opportunity cost for holding cash is too high. It earns virtually nothing, and you’re guaranteed to lose money to inflation. Just get over your fear and buy stocks!

SilasX 9y ago
I get that the article promises to refute what the OP said, but if it really provided a relevant insight, you should be able to summarize the insight so as to contribute to the current discussion and let others know whether they've already heard the argument, or what crucial assumptions it makes, and whether the refutation really gets at the core point of the parent's objection (or is just nitpicking). And save the thousand people 15 minutes of figuring it out. It would be much more helpful to say something like "having an investment of stable value can decrease the volatility of the returns as you balance in and out during the market ups and downs, and improving the risk-adjusted returns, which back-testing can demonstrate". (I don't know if that's what it said, but that's an example of contributing the insights back to the discussion.) And if the article really did provide insight, wouldn't it be easy to produce a paragraph like the above?
- snikeris 9y ago
  I appreciate you schooling me on how to better contribute to the discussion. This was my attempt at what you're discussing (admittedly appended perhaps after your initial comment): > Harry's 25% cash isn't dollar bills, it's treasury bills, which have held up to inflation. OP seemed to be under the misconception that cash meant dollar bills under the mattress. The article addresses this in the section beginning "To explain, I think it helps to start with the definition of cash..." OP seemed to be under the misconception that cash responds poorly to inflation, which the article also addresses.
  - SilasX 9y ago
    If your only point is that "cash" includes short-term T-bills, then 1) What else is the article adding? The fact that it (historically) yields something above inflation was enough to refute the OP's implied claim about negative real returns. 2) That wouldn't address the OP's point that they still have a low RoR for a long-term portfolio. 3) As in my comment it wouldn't refute that T-bills haven't kept up with inflation recently. If the article's point is about how balancing into/out of a stable investment can improve portfolio return, then that would warrant a summary in your comment. Sorry if my comments come off as mean. I'm trying to convey why a giant article might not be helpful to resolving the disagreement.
    - snikeris 9y ago
      My points were that cash includes short-term T-bills, and that they have held up to inflation, both points addressed in the article I linked. > Sorry if my comments come off as mean. You're not coming off as mean. I can tell you're genuinely trying to improve the discussion here, and you reminded me that when I'm replying to someone, the audience is wider than just that person. Thanks.

SilasX 9y ago

I get that the article promises to refute what the OP said, but if it really provided a relevant insight, you should be able to summarize the insight so as to contribute to the current discussion and let others know whether they've already heard the argument, or what crucial assumptions it makes, and whether the refutation really gets at the core point of the parent's objection (or is just nitpicking). And save the thousand people 15 minutes of figuring it out. It would be much more helpful to say something like "having an investment of stable value can decrease the volatility of the returns as you balance in and out during the market ups and downs, and improving the risk-adjusted returns, which back-testing can demonstrate". (I don't know if that's what it said, but that's an example of contributing the insights back to the discussion.) And if the article really did provide insight, wouldn't it be easy to produce a paragraph like the above?

snikeris 9y ago
I appreciate you schooling me on how to better contribute to the discussion. This was my attempt at what you're discussing (admittedly appended perhaps after your initial comment): > Harry's 25% cash isn't dollar bills, it's treasury bills, which have held up to inflation. OP seemed to be under the misconception that cash meant dollar bills under the mattress. The article addresses this in the section beginning "To explain, I think it helps to start with the definition of cash..." OP seemed to be under the misconception that cash responds poorly to inflation, which the article also addresses.
- SilasX 9y ago
  If your only point is that "cash" includes short-term T-bills, then 1) What else is the article adding? The fact that it (historically) yields something above inflation was enough to refute the OP's implied claim about negative real returns. 2) That wouldn't address the OP's point that they still have a low RoR for a long-term portfolio. 3) As in my comment it wouldn't refute that T-bills haven't kept up with inflation recently. If the article's point is about how balancing into/out of a stable investment can improve portfolio return, then that would warrant a summary in your comment. Sorry if my comments come off as mean. I'm trying to convey why a giant article might not be helpful to resolving the disagreement.
  - snikeris 9y ago
    My points were that cash includes short-term T-bills, and that they have held up to inflation, both points addressed in the article I linked. > Sorry if my comments come off as mean. You're not coming off as mean. I can tell you're genuinely trying to improve the discussion here, and you reminded me that when I'm replying to someone, the audience is wider than just that person. Thanks.