5 ms·

Real interest rates are still negative, with inflation being at 9%. So even if the yield is 3%, on the 5 year treasury, the real yield is -6%. What fool would l

Real interest rates are still negative, with inflation being at 9%. So even if the yield is 3%, on the 5 year treasury, the real yield is -6%. What fool would lend someone 100 dollars to get back 94 dollars in 5 years? The biggest sucker is the person who owns a 30 year treasury, and if the Fed starts selling its treasuries, good luck getting a reasonable price for it.

BayAreaEscapee 5y ago
The obvious problem is that there is nowhere to hide. All markets are overvalued by virtually any historical metric. At least if you take the -6% real hit, at least you can know and predict what the hit is.
- mise_en_place 5y ago
  My portfolio with foreign value stocks and gold and silver mining stocks, plus oil companies is doing great. I am up by more than 10%. This is just the beginning for them. My financial advisor who manages the vast majority of my wealth is down 2% in comparison. I'm close to pulling my money because he's extremely anti commodities and I had to yell at him to invest my money into mining companies because he thinks it's better to just hold cash. Meanwhile my networth disappears. Don't use a financial advisor would be my advice to you and do your own research.
  - WalterBright 5y ago
    If you're telling your financial advisor what to invest in, what's the point in having one?
    - ThalesX 5y ago
      Probably to advise you and take care of the nitty gritty details of your decisions.
  - rrrrrrrrrrrryan 5y ago
    I think oil is a moderately risky bet on future geopolitical-economic turmoil, which is far from guaranteed, but your other bets are much more conservative. How are you invested in "foreign value stocks"? (e.g. are there certain funds / ETFs? Individual stocks?)
  - sethammons 5y ago
    > he thinks it's better to just hold cash That doesn't make sense to me. Equities can rebound, cash cant
  - jason0597 5y ago
    How much wealth would one even have to warrant having a financial advisor? And also, aren't they a waste of money most of the time? Their function can be reduced to flowcharts you get from Reddit a lot of the time
- TimJRobinson 5y ago
  You can fairly easily get a safe 10% (20% in bullish times) return on USD in crypto markets. Still high because most people haven't figured it out yet and there isn't good enough regulation for institutions.
  - coolspot 5y ago
    > Safe > Crypto Choose one
  - mrep 5y ago
    "safe" https://rekt.news/leaderboard/ https://rekt.news/leaderboard/
    - TimJRobinson 5y ago
      Do you use a bank? Did you know the bank of Bangladesh was robbed for hundreds of millions? Banking sure sounds risky, better not use them. That's how your response comes off to people that actually understand the space. Less than 0.1% of the value in crypto has been exploited and it's always new startups. But sure dig your head in the sand and avoid the best way to hedge against inflation because you base your risk assumptions off news headlines.
      - mrep 5y ago
        Well I don't live in Bangladesh so I'm not too worried.
        TimJRobinson 5y ago
        And I don't YOLO money into smart contracts that haven't been battle tested. It's easy to avoid getting rekt with common sense.
okaram 5y ago
Real interest rates were negative, unless you expect prices to be 9% higher than now next year
layer8 5y ago
> What fool would lend someone 100 dollars to get back 94 dollars in 5 years? Some banks actually offer loans with negative interest: https://amp.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage https://amp.theguardian.com/money/2019/aug/13/danish-bank-la... (there are other examples)
ericd 5y ago
Someone betting that we'll hit a deflationary recession/crash where inflation will plummet along with interest rates, making their locked in interest rate advantageous?
- marcosdumay 5y ago
  Is the interest banks pay on deposit locked in any way (on the US)? I got the impression it changed month to month.
  - ericd 5y ago
    It's not, unless you have a CD with them. But T-Bills have a fixed implied interest rate for the term.
- throttledagain2 5y ago
deleted 5y ago
[deleted]
newaccount2021 5y ago

BayAreaEscapee 5y ago

The obvious problem is that there is nowhere to hide. All markets are overvalued by virtually any historical metric. At least if you take the -6% real hit, at least you can know and predict what the hit is.

mise_en_place 5y ago
My portfolio with foreign value stocks and gold and silver mining stocks, plus oil companies is doing great. I am up by more than 10%. This is just the beginning for them. My financial advisor who manages the vast majority of my wealth is down 2% in comparison. I'm close to pulling my money because he's extremely anti commodities and I had to yell at him to invest my money into mining companies because he thinks it's better to just hold cash. Meanwhile my networth disappears. Don't use a financial advisor would be my advice to you and do your own research.
- WalterBright 5y ago
  If you're telling your financial advisor what to invest in, what's the point in having one?
  - ThalesX 5y ago
    Probably to advise you and take care of the nitty gritty details of your decisions.
- rrrrrrrrrrrryan 5y ago
  I think oil is a moderately risky bet on future geopolitical-economic turmoil, which is far from guaranteed, but your other bets are much more conservative. How are you invested in "foreign value stocks"? (e.g. are there certain funds / ETFs? Individual stocks?)
- sethammons 5y ago
  > he thinks it's better to just hold cash That doesn't make sense to me. Equities can rebound, cash cant
- jason0597 5y ago
  How much wealth would one even have to warrant having a financial advisor? And also, aren't they a waste of money most of the time? Their function can be reduced to flowcharts you get from Reddit a lot of the time
TimJRobinson 5y ago
You can fairly easily get a safe 10% (20% in bullish times) return on USD in crypto markets. Still high because most people haven't figured it out yet and there isn't good enough regulation for institutions.
- coolspot 5y ago
  > Safe > Crypto Choose one
- mrep 5y ago
  "safe" https://rekt.news/leaderboard/ https://rekt.news/leaderboard/
  - TimJRobinson 5y ago
    Do you use a bank? Did you know the bank of Bangladesh was robbed for hundreds of millions? Banking sure sounds risky, better not use them. That's how your response comes off to people that actually understand the space. Less than 0.1% of the value in crypto has been exploited and it's always new startups. But sure dig your head in the sand and avoid the best way to hedge against inflation because you base your risk assumptions off news headlines.
    - mrep 5y ago
      Well I don't live in Bangladesh so I'm not too worried.
      - TimJRobinson 5y ago
        And I don't YOLO money into smart contracts that haven't been battle tested. It's easy to avoid getting rekt with common sense.

okaram 5y ago

Real interest rates were negative, unless you expect prices to be 9% higher than now next year

layer8 5y ago

> What fool would lend someone 100 dollars to get back 94 dollars in 5 years? Some banks actually offer loans with negative interest: https://amp.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage https://amp.theguardian.com/money/2019/aug/13/danish-bank-la... (there are other examples)

ericd 5y ago

Someone betting that we'll hit a deflationary recession/crash where inflation will plummet along with interest rates, making their locked in interest rate advantageous?

marcosdumay 5y ago
Is the interest banks pay on deposit locked in any way (on the US)? I got the impression it changed month to month.
- ericd 5y ago
  It's not, unless you have a CD with them. But T-Bills have a fixed implied interest rate for the term.
throttledagain2 5y ago

deleted 5y ago

[deleted]

newaccount2021 5y ago