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I'm not a financial planner or financial services professional of any kind, so take anything I say with a grain of salt. 1) should I stop saving? No. negative

I'm not a financial planner or financial services professional of any kind, so take anything I say with a grain of salt. 1) should I stop saving? No. negative interest rates won't go that negative. Even if your bank is earning -1% interest, it still makes sense to be saving. 2) Should I put my savings elsewhere? Probably. ETFs or index funds with wide stock market exposure are a good idea (good examples are SPY, VOO, VO, VFINX... and many others). You make money by buying stocks when the market is low and selling when the market is high. Long term, it will probably go up as it always has. That said, it's very hard to time the market, so the best strategy is to put your money in over time. One good way to do this is to take a set amount of money from each paycheck and invest it every pay period, regardless of what the market is at. If you have a bunch of money sitting in savings right now, maybe divide it into 52 parts (or 104 or 156 or even 208 depending on your risk tolerance and/or thoughts on how long this market decline will last) and invest that amount each week. 3) Should I take out loans to buy up assets? Probably not. No one is gonna give you an unsecured loan at a good enough rate that will make this worthwhile. And a secured loan will be against something like a house, which you probably don't want to risk losing. This is almost never a good idea. One big exception might be buying a home. When the dust settles, the real estate market might take a big hit in which case taking out a loan (i.e. a mortgage) to buy a home might be a good idea. 4) Should I build businesses and raise venture capital for them? Depends on the business. Venture capital money is going to tighten up a lot. People just aren't going to be throwing around money during a recession in the way that they did 6 months ago. But if you can stomach it, this is probably as good a time as ever to build a business that can get to profitability quickly. The only caveat is that it might be a risky time to quit a job with a stable income. Typically, it's easy to take for granted that if your business fails you can just get a job. Right now, that seems less certain.

dtnewman 7y ago
> No. negative interest rates won't go that negative. Even if your bank is earning -1% interest, it still makes sense to be saving. A great way to lock in decent rates and still have the safety of a bank account is with CDs. See https://www.ally.com/bank/cd-rates/ https://www.ally.com/bank/cd-rates/ for example, where you can get 1.45-1.55% guaranteed interest on an 18 month CD where you can pull your money out at any time without penalty. A month ago, I put money into this same CD when rates were closer to 1.9%. Now is a good time to lock this in as these rates can go lower (but if they go up, you can simply withdraw your money and reinvest). > Venture capital money is going to tighten up a lot. This makes it especially important to think about a path to profitability. A lot of great startups are going to go under because they won't raise the money to keep going for the next 12-18 months, even though long-term they might be great (viable) businesses
- whycombagator 7y ago
  The Ally no penalty CD offerings are 11 months only. Side note: Last year, at one point, they were 2.3%
  - dtnewman 7y ago
    My bad... I meant 11 months. Thanks for pointing that out. In any case, the overall point stands. At a minimum, most people would benefit from this kind of CD over the money sitting in a savings account. It gives you a low, but decent return while you wait to invest in the market (or other things).
shawnz 7y ago
> That said, it's very hard to time the market, so the best strategy is to put your money in over time. One good way to do this is to take a set amount of money from each paycheck and invest it every pay period, regardless of what the market is at. If you have a bunch of money sitting in savings right now, maybe divide it into 52 parts (or 104 or 156 or even 208 depending on your risk tolerance and/or thoughts on how long this market decline will last) and invest that amount each week. It seems counterintuitive but dollar-cost averaging is really just another way of timing the market. The only way to avoid the downfalls of market timing is to invest everything you want to invest, as soon as you can. Dollar-cost averaging typically loses compared to that strategy. See: http://valueaveraging.ca/research/Analysis_Dollar_Cost_Averaging.pdf http://valueaveraging.ca/research/Analysis_Dollar_Cost_Avera...
- tarsinge 7y ago
  Is timing the market always wrong though? I don't feel like I made a bad deal selling one month ago and now re-entering DCA. It was obvious that the US market was not correctly pricing this pandemic. I think there is a middle ground between day trading and never touching anything.
  - shawnz 7y ago
    It's always wrong if you take luck out of the equation. With DCA, the problem is all the cash you have sitting around NOT invested while in the process of executing the strategy is really just money that you are betting against the market with. For example, maybe there will be a downturn for the next 2 months but what about the 7 months following that? They could all be green for all we know, and all that money would be sitting around being lost to inflation. Also consider this: on average, missing just the best 10 trading days of each year would cut your returns in half, historically. We have already had several huge single-day rallies even in this downturn, and people who divested for that period may have made their losses even worse by doing that.
  - jcomis 7y ago
    Basically you got lucky this time. Generally it's not good advice.

dtnewman 7y ago

> No. negative interest rates won't go that negative. Even if your bank is earning -1% interest, it still makes sense to be saving. A great way to lock in decent rates and still have the safety of a bank account is with CDs. See https://www.ally.com/bank/cd-rates/ https://www.ally.com/bank/cd-rates/ for example, where you can get 1.45-1.55% guaranteed interest on an 18 month CD where you can pull your money out at any time without penalty. A month ago, I put money into this same CD when rates were closer to 1.9%. Now is a good time to lock this in as these rates can go lower (but if they go up, you can simply withdraw your money and reinvest). > Venture capital money is going to tighten up a lot. This makes it especially important to think about a path to profitability. A lot of great startups are going to go under because they won't raise the money to keep going for the next 12-18 months, even though long-term they might be great (viable) businesses

whycombagator 7y ago
The Ally no penalty CD offerings are 11 months only. Side note: Last year, at one point, they were 2.3%
- dtnewman 7y ago
  My bad... I meant 11 months. Thanks for pointing that out. In any case, the overall point stands. At a minimum, most people would benefit from this kind of CD over the money sitting in a savings account. It gives you a low, but decent return while you wait to invest in the market (or other things).

shawnz 7y ago

> That said, it's very hard to time the market, so the best strategy is to put your money in over time. One good way to do this is to take a set amount of money from each paycheck and invest it every pay period, regardless of what the market is at. If you have a bunch of money sitting in savings right now, maybe divide it into 52 parts (or 104 or 156 or even 208 depending on your risk tolerance and/or thoughts on how long this market decline will last) and invest that amount each week. It seems counterintuitive but dollar-cost averaging is really just another way of timing the market. The only way to avoid the downfalls of market timing is to invest everything you want to invest, as soon as you can. Dollar-cost averaging typically loses compared to that strategy. See: http://valueaveraging.ca/research/Analysis_Dollar_Cost_Averaging.pdf http://valueaveraging.ca/research/Analysis_Dollar_Cost_Avera...

tarsinge 7y ago
Is timing the market always wrong though? I don't feel like I made a bad deal selling one month ago and now re-entering DCA. It was obvious that the US market was not correctly pricing this pandemic. I think there is a middle ground between day trading and never touching anything.
- shawnz 7y ago
  It's always wrong if you take luck out of the equation. With DCA, the problem is all the cash you have sitting around NOT invested while in the process of executing the strategy is really just money that you are betting against the market with. For example, maybe there will be a downturn for the next 2 months but what about the 7 months following that? They could all be green for all we know, and all that money would be sitting around being lost to inflation. Also consider this: on average, missing just the best 10 trading days of each year would cut your returns in half, historically. We have already had several huge single-day rallies even in this downturn, and people who divested for that period may have made their losses even worse by doing that.
- jcomis 7y ago
  Basically you got lucky this time. Generally it's not good advice.