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> Thiel showed that you do not need to invest in index funds in a Roth IRA, which is what most people have been saying investors should do for a long time. The

> Thiel showed that you do not need to invest in index funds in a Roth IRA, which is what most people have been saying investors should do for a long time. The thing that is blowing the personal finance world’s minds is the idea that people can and perhaps even should be much more aggressive within their Roth IRAs in hopes of running into some stock that goes bananas, therefore giving you a personal, tax-free slush fund to invest in anything for the rest of your life. > “You want to put in [to a Roth IRA] highly undervalued assets that could grow massively in value,” Joshua Sheats, the host of the show, said on an episode that extensively praised Thiel’s strategy. So the "investing tip" is to gamble on wildly speculative investments rather than invest in index funds. Investing in highly undervalued assets - it's so simple, why didn't I think of that sooner!? This will make a few wildly rich, and many more will underperform the market. On average, everyone will do just as well as an index fund would've, because averaging is the entire point of index funds. I'd be way more interested in repeatable advice for how to turn $2000 into $5B than I am in how to avoid paying taxes on it.

perl4ever 5y ago
>So the "investing tip" is to gamble on wildly speculative investments rather than invest in index funds. Investing in highly undervalued assets - it's so simple, why didn't I think of that sooner!? I don't think that's as useless a tip as you make it sound. Suppose everybody invests in exactly the S&P 500. Nevertheless, each person can decide to hold the more speculative stocks in their Roth IRA and the others in a regular IRA, 401k, or taxable account. That doesn't require identifying the best investments, just the relatively volatile ones. So it seems like logical advice that is practical to implement, to me.
- xref 5y ago
  It’s a useless tip. If you have the ability to pick a $5bil winner you don’t need an ira. Just keep picking yourself $5bil winners in a regular taxable account and you’ll be fine.
  - perl4ever 5y ago
    > If you have the ability to pick a $5bil winner Nobody here thinks people can do that. I asserted the tip is meaningful even assuming people can't pick winners. The universe of available stocks contains different companies, with different market capitalizations, and different historical volatilities. Assuming you can't select the best performing ones, you can still select the ones that are smaller and more volatile. Do you have an issue with the assertion that owning foreign stocks, mutual funds, ETFs, etc (for a US person) is best done in a taxable account and not an IRA? Or does market efficiency indicate to you that shouldn't matter?

perl4ever 5y ago

>So the "investing tip" is to gamble on wildly speculative investments rather than invest in index funds. Investing in highly undervalued assets - it's so simple, why didn't I think of that sooner!? I don't think that's as useless a tip as you make it sound. Suppose everybody invests in exactly the S&P 500. Nevertheless, each person can decide to hold the more speculative stocks in their Roth IRA and the others in a regular IRA, 401k, or taxable account. That doesn't require identifying the best investments, just the relatively volatile ones. So it seems like logical advice that is practical to implement, to me.

xref 5y ago
It’s a useless tip. If you have the ability to pick a $5bil winner you don’t need an ira. Just keep picking yourself $5bil winners in a regular taxable account and you’ll be fine.
- perl4ever 5y ago
  > If you have the ability to pick a $5bil winner Nobody here thinks people can do that. I asserted the tip is meaningful even assuming people can't pick winners. The universe of available stocks contains different companies, with different market capitalizations, and different historical volatilities. Assuming you can't select the best performing ones, you can still select the ones that are smaller and more volatile. Do you have an issue with the assertion that owning foreign stocks, mutual funds, ETFs, etc (for a US person) is best done in a taxable account and not an IRA? Or does market efficiency indicate to you that shouldn't matter?