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An entire flock of canaries has died at this point. Last chance to rush for the exit. The question is of course: where do you park your money before the big o
by ur-whale 7y ago
An entire flock of canaries has died at this point.
Last chance to rush for the exit.
The question is of course: where do you park your money before the big one hits so as to minimize the damages.
Cash?
High-tech stocks?
Real estate?
Cryptos?
Bonds [lol]?
Art?
[edit] : not sure why the downvotes, this is a legitimate question: if you anticipate a recession in the next 2 years (I do) how do you structure your portfolio to minimize the damage?
- magashna 7y agoCurious about this as well.
- arthurcolle 7y agoCryptos and big tech companies.
- mbillie1 7y agoThose famously stable cryptos sound perfect yeah.
- arthurcolle 7y agohttps://www.youtube.com/watch?v=B-bSSCWVNUg https://www.youtube.com/watch?v=B-bSSCWVNUg
- jacquesm 7y agoReal estate works well if you don't need to liquidate in a hurry at some point. You can't time the market, the stock market or the real estate market it makes no difference. But real estate will at least generate some income (though it is not easy money).
- the-dude 7y agoFor most people this is not a question at all, because they hardly have money. But hey, you are a whale. Need to park your money? I have plenty of room!
- ur-whale 7y ago> For most people this is not a question at all, because they hardly have money. I am asking the HN crowd, not most people. My guess is, given how many seem to work in the valley, they do have a little more money than most people and therefore skin in this game.
- the-dude 7y agoSo I guess you don't want to park your money at my place? Bummer.
- short_sells_poo 7y agoIf you have an appreciable amount of assets (>$10m) you'd put some amount in a special Tail Event Protection fund who know what they are doing and will invest in a combination of volatility linked derivatives, risk-off assets (short dated bonds, precious metals, rates, etc...) and dynamic equity shorting strategies. They will do so with some amount of finesse, as many of the most effective tail hedge strategies cost a lot of money to fund. Unless you do the analysis yourself, which is anything but trivial, it is extremely unlikely that you'll do a good job at judging where the tradeoff should be. If you have less, generally the best advice is to do nothing and weather it out, because the truth of the matter is that practically nobody can time the market, not even on the horizon of years and any attempts to do so will cost you more than doing nothing would have. There is no silver bullet unfortunately. Think of it like this, if there was a cheap and easily accessible protection against crashes, people would pile into it and make it ineffective or expensive. Which is exactly what happens.
- JohnJamesRambo 7y agoBTC halving is coming up...
- scrumbledober 7y agowhat sort of effect do you expect this to have on BTC/USD? has it had a consistent effect previous times it has happened?
- JohnJamesRambo 7y agohttps://www.tradingview.com/chart/BTCUSD/UuzUBUTa-Bitcoin-4-Year-Cycle/ https://www.tradingview.com/chart/BTCUSD/UuzUBUTa-Bitcoin-4-... It seems to contribute greatly to the four year cycle that bitcoin has followed so far. Hit play on the graph to see where we are now. The blue lines are the halving dates, where mining rewards are halved, reducing supply.
- RickJWagner 7y agoMost definitely not high tech stocks.
- watoc 7y agoGold? Doesn't generate any income though.
- tunesmith 7y agoRay Dalio has been recommending gold... not in a "put all your money in it" manner, but more like "put 7-10% of your portfolio in it" as a way to protect against the market movements that are bad for both stocks and bonds, which in turn apparently tend to be good for gold. I don't know if this is that situation though, or if this is part of what he calls "pushing on a string". It's hard to make sense of all this. Supposedly, every 75-100 years there are Big corrections, but I thought the idea was that that was what we went through ten years ago, with the debt crisis and the "beautiful deleveraging" etc. So if that's true we're more looking at a run-of-the-mill recession coming at some point. But on the other hand maybe that crisis ten years ago wasn't actually the Big One.
- short_sells_poo 7y agoGold is weird, and I find it very disingenuous when it gets recommended to uninformed investors . Gold would not have protected you in 2008 for example. As a matter of fact, it sold off at first, further compounding the headaches of anyone who was using it as a hedge. It started gaining along with the recovery in the stocks. I'm not saying you are uninformed or Ray Dalio recommended it to uninformed investors. However, these things then get picked up and parroted by less scrupulous individuals.
- tunesmith 7y agoNo worries, I've experienced more than a few gold recommendations from folks that have otherwise showed poor judgment, so I've always been suspicious. Dalio has so far made sense to me, but man... trying to figure out how to dip into gold as a run-of-the-mill investor is not easy, at least not through Fidelity. It's either high fees or buying into gold mining stocks which doesn't seem quite right. So, in the absence of going full-time into the investor rabbit hole, I'm guessing I'll be in the same boat as everyone else, trying to keep my stock/bonds allocation model rebalanced every few months as it theoretically all goes through the floor together. :-/
- watoc 7y agoThe easiest way is usually to trade one of the ETFs that track gold price (some of them are backed by physical gold while others use futures or other derivatives on gold).
- war1025 7y agoPersonally just going for the tried and true "index funds + ride the market" approach. Don't need the money right now or for any time in the foreseeable future. Have the appropriate emergency savings to handle short-term needs. Paid cash for my house, so don't need to worry about making a mortgage payment. Personal feeling is that if the market implodes to the point that this strategy doesn't work, everyone has much bigger problems to worry about.
- z3t4 7y agoAttractive land/houses in big cities are safe investments, even if everything goes to hell you still have a nice house.
- jayalpha 7y agoYes. Sure. If they don't come with a loan or a city taxing your asshole away with property taxes.
- pembrook 7y agoAssuming "the big one" is constantly just around the corner is a really bad investment strategy. Just look at the pure statistics of it, the US stock market finishes the year positive over 74% of the time. You're playing a losing game trying to time it. I know many of us are still emotionally scarred from the last credit crisis...but storing cash under your mattress is the wrong way to respond to those feelings. It was dumb when my grandparents did it 80 years ago after the Great Depression, and it is still dumb in 2019. Of course, the world is uncertain and could end tomorrow. If you're uncomfortable with that idea, perhaps try religion?
- internet_user 7y ago> Assuming "the big one" is constantly just around the corner is a really bad investment strategy. Incidence of "black swans" is much higher than we except. Not only it's a valid strategy, it's how massive fortunes are made, as long as you control losses.
- pembrook 7y agoZero “massive fortunes” are made pulling your money out of the market and hiding in cash like OP suggested because you are scared. To profit off of a black swan event, you need to do 3 insanely hard things. You need to 1) predict both the exact timing of the the crash & the recovery after 2) predict the scale of the move downward and 3) actually go short and expose yourself to massive asymmetric risk. Massive fortunes are also made at the casino once in a while. That doesn’t mean it’s a repeatable strategy. Paul Tudor Jones and John Paulson know a thing or two about this.
- jayalpha 7y agoBig farm. No kidding.
- short_sells_poo 7y agoActually this is the only sensible advice in this thread. The one asset in limited supply is land, and the one commodity that we all are fundamentally dependent upon is food and water. Both require the appropriate land.
- ur-whale 7y agoInteresting idea that I had not considered. But not a simple endeavor.
- felipellrocha 7y agowhy the lol at bonds?
- ur-whale 7y agoI was specifically thinking of govt debt, and: https://www.ecb.europa.eu/stats/financial_markets_and_interest_rates/euro_area_yield_curves/html/index.en.html https://www.ecb.europa.eu/stats/financial_markets_and_intere...