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US equity doesn't pretend to be a low risk investment vehicle resistant to inflation worries.
by dragontamer 5y ago
US equity doesn't pretend to be a low risk investment vehicle resistant to inflation worries.
- mule1 5y agoExcept it does
- simonh 5y agoIt historically has grown reliably overall at the market level, but individual equities are not that at all. BTC specifically was supposed to be that, and it isn't.
- endisneigh 5y agoHow?
- mule1 5y agoIt's common financial advice if you invest in the US equity market index you will get a 7% return a year
- endisneigh 5y agoOver long periods, on average, historically - no one is saying you will always get that in any given year.
- mule1 5y agoSame with crypto. We have 10 years of data so far.
- obese44 5y ago[flagged]
- carnitine 5y agoWhat? The losses of 2008 were recovered from a few years later.
- ulfw 5y agoNeither does crypto. Out of all things that's about the least "low risk" I've seen yet.
- dragontamer 5y agoStore of value. US money printer. Inflation hedge. Do you think we forget what the crypto-bros said just a few months ago?
- thebean11 5y agoNone of those necessarily imply low risk / volatility, and on the long term chart crypto has satisfied all 3
- dragontamer 5y agoYou can't be a store of value if your value drops randomly. You especially can't be an inflation hedge if you drop while inflation goes up.
- thebean11 5y agoAlthough obviously not as dramatic as crypto, gold has had huge drops and multi year bear markets, but it's still considered an inflation hedge. The housing market has had huge dips too. Neither is as volatile as crypto, but my point is no asset has a guarantee that its value won't "drop randomly", simply not possible. Inflation was positive during the real estate crash of '08 and during multiple gold bear markets. If your time horizon is long enough, a volatile asset can still be a good inflation hedge.
- dragontamer 5y ago2008 was a period of deflation. Of course inflation hedges would drop, when inflation was negative. Oil, housing, car prices all dropped at that time. Prices dropped so low that companies like General Motors went bankrupt. ------- We face an opposite problem today. Prices are going up. Old established companies love this, they can sell their stuff at higher prices. Aka, inflation. Turns out crypto was terrible at hedging this scenario.
- 3np 5y agoThere is no cryptocurrency in the top 10 pretending to be low-risk. There are probably way more financial advisors claiming that US equity is low-risk than there are people claiming the same for any cryptocurrency.
- macacoprego 5y agodid you just said that crypto pretends to be a low risk investment?