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Wish I knew too. Do you put it in savings, where the inflation erodes away its purchasing power? Do you put it in the stock market, where raising interest rates
by dangrossman 5y ago
Wish I knew too. Do you put it in savings, where the inflation erodes away its purchasing power? Do you put it in the stock market, where raising interest rates could precipitate a crash that wipes out much of your portfolio? Do you put it in real estate, but possibly end up buying at the top of an asset bubble there? There seems to be no safe answer. If you have six or seven figures in assets, the $10K/year limit on inflation-protected bonds doesn't help you.
I'm about 33/33/33 cash, stocks and real estate right now. Stuff that feels like it should be an inflation hedge, like commodity ETFs, aren't actually performing well. I haven't found any good advice from family, friends, or the internet in the past few years. It makes me think nobody else knows how to safeguard their savings these days either.
- orbifold 5y agoGold seems like one obvious answer. The other could be crypto.
- stevenhuang 5y agoRe stock market, at least there are many neutral-bearish options strategies. They come with other risks of course and you sort of need to know what you're doing, but the concepts are not difficult. Currently I have a bunch of QQQ credit call spreads, and much of my long share losses have been tempered by selling ATM calls.
- boppo1 5y agoWhat do you do for a living, and how did you learn about options? Do you do any risk management?
- stevenhuang 5y agoSoftware in non-financial field, investing is just something I find interest in so I have found it easy to absorb knowledge through various means (misc books, forums, etc). And yes, risk management is the name of the game, especially when it comes to options. Basically comes down to trade size (don't have say more than 5% acc size in one position) and being aware of your risks (how many "deltas" you have on, etc). The best way to learn is do. Trade with small amounts to understand your trading platform, identify a strategy you're comfortable with & stick to it, learn from your mistakes. tastytrades youtube playlist on selling options (theta gang strategies) is a good start and I found it helpful in the beginning to learn concepts.
- boppo1 5y agoNeat, thanks!
- nukemaster 5y ago>how did you learn about options Memes from Reddit and 4chan's "biz" board.
- boppo1 5y agoThat's where I learned about safemoon!
- prewett 5y agoA stock market crash only wipes out your portfolio if you sell. If the company is at all viable it will be able to raise prices with inflation, thus continuing to exist. You own a piece of the company, and maybe the price other people are willing to pay you for that does not reflect the actual value of the company. So when Mr. Market uncrashes and is more optimistic about the future, you can sell then. Or, better yet, just buy something you'd like to own forever (paying a dividend helps make forever look more attractive). A company like Coca-Cola is pretty inflation-proof, to my mind. Not only does the product have a demonstrated multi-decade appeal, including during a full-on Depression, but the company is working hard to make it more valuable tomorrow.