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Some people apply discounted cash flow analysis to current market prices, and conclude that the expected market return is -6% (or worse) under current condition
by mellavora 5y ago
Some people apply discounted cash flow analysis to current market prices, and conclude that the expected market return is -6% (or worse) under current conditions.
I'd prefer my checking account to have 0% returns to -6%.
It is simple for me to set up automatic deposits from my checking account to my brokerage account, and also include automated investment of those funds.
Perhaps I'm old fashioned, but I'm not really seeing the value prop. I have an investment account separate from my checking for a reason. Many reasons, actually.
and to close, referring to your interest in portfolio theory, there is an option value to holding cash. Not saying it should be a major portfolio allocation, but having a certain amount in cash makes sense from a financial engineering perspective.
- dannyw 5y agoIn a short term time horizon, sure. But what if you use a service/strategy like OP over a decade, or more? Since 2016; I have more or less keep all of my cash, minus a small emergency fund, invested into equities at all times. I have nearly twice as much wealth as I would otherwise have, if I didn't do this and kept cash. I'm not worried whatsoever on what analysts predict. They are consistently as wrong as they are right, and I've been hearing calls for overvaluations and market crashes for years and years ever since 2013. You can't time the market.
- endisneigh 5y agoI’m not sure what this has to do with the parent comment, who’s saying you can just automatically move money to an investment account now.