8 ms·
Why not just put it index funds? If you already have far more money than you need, the average market rate of return should be acceptable. There's no need to tr
by JMTQp8lwXL 7y ago
Why not just put it index funds? If you already have far more money than you need, the average market rate of return should be acceptable. There's no need to try and 10x or 100x without, well, losing all of it, since the type of investments with that potential high of an upside are incredibly risky. Don't bet the farm.
- hogFeast 7y agoToo much money. Once you pass a certain amount of money, it is very hard to diversify because you are such a large share of the market. I am not exactly sure where this number lies nowadays but once you pass $10bn or so, you can't own much outside the S&P500 without running into liquidity problems. The only market with infinite liquidity is US Treasuries (that is where the Chinese put their $3trn of foreign currency reserves). Mortgage-backed were liquid until GFC, and liquidity in corporates is falling because dealers can't carry inventory (afaik, not expert...MBS pre-GFC was ultra liquid for sure though and seen as an alternative to USTs). The Saudis own $150bn here (and growing because of Trump/MBS relationship apparently) but I think the issue the Saudis have is that they have a fucking huge budget deficit. There are tons of people on do-nothing, civil servant jobs (mainly royal family members), they have to spend a ton on defence (ostensibly against external threat but the royal family is terrified of an uprising too), and they spend a ton on welfare to buy popularity. They are definitely investing for a return.