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People don’t keep EFs to maximize their expected net worth. They do it to keep worst case scenarios within reasonable bounds. You argue keeping stocks is ideal
by pedrosorio 6y ago
People don’t keep EFs to maximize their expected net worth. They do it to keep worst case scenarios within reasonable bounds.
You argue keeping stocks is ideal for 2 (sure) and it doesn’t hurt 1 (assuming your net worth is significantly higher than what you’d keep as EF). Agreed.
An EF is for
3. Maximize long-term net worth in x th percentile of outcomes (where x < 10)
EDIT: “ you must really be against investing on margin while having an EF”. Yep.
- Moodles 6y agoOk but now we're just personally disagreeing on what x is, which as I said in my first post, is fine. But just be aware of the bias.