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>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a mira

>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing. Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that the geopolitical shock has disrupted the endless stream of cheap stuff made elsewhere, turns out there's an abundance of dollars and shortage of everything else. There might be a rather non-trivial correction ahead of us.

landemva 4y ago
>> there's an abundance of dollars Slightly different perspective here - there is an abundance of debt that spends like dollars. Government debt and some pension debt is nearly unserviceable in some States and countries, so there will be a dollar short squeeze in attempt to get dollars to pay the debt. Yep, seems counter-intuitive at first glance that the USD short squeeze will increase the dollar appetite.
bmitc 4y ago
What do you suggest?
- UkrainianJew 4y ago
  Bonds might become a thing again with the interest rates above 3%.
  - stocknoob 4y ago
    Bonds will take a hit if interest rates keep rising. (Look at how they’ve done year to date.) If you want to actually hedge your investments, use a collar. https://www.investopedia.com/articles/active-trading/011515/how-protective-collar-works.asp https://www.investopedia.com/articles/active-trading/011515/...
    - UkrainianJew 4y ago
      Existing long-term bonds take a hit. Because if today you can get a 6% bond maturing in 2030, nobody will buy your 3% bond unless you price it down accordingly. But if you keep getting them in 1-year increments as long as you expect the rates to rise, you just keep cashing out at maturity and reinvesting at the yield rate of the day.
jliptzin 4y ago
There have been a ton of real technological advances since 2008 that is not just on paper. You could have also said the exact same thing in 2000.
- UkrainianJew 4y ago
  Kinda, but a lot of them are about manufacturing more cheap stuff in China. Most technological advances not involving that are about skirting the regulations/antitrust laws (AirBnB, Uber, Google Ads) or using dark patterns to manipulate attention (Meta).
  - jliptzin 4y ago
    You are distracted by clickbait news and ignoring important advances made since 2008, a few examples which is just scratching the surface because there is a ton I am personally not even aware of: * Greatly reduced cost of solar panels and batteries * Things like uber/doordash made taxis / takeout way more efficient * Transitioning to electric vehicles. In 2008 I'd pay $50/week for fuel, now I pay $10/week to travel the same distance in my electric car. Not to mention savings in oil changes/maintenance * mRNA vaccines nonexistent in 2008 * Significant progress towards autonomous vehicles, if that comes to fruition on a large scale it will transform our society
synu 4y ago
Something beyond a regression to the mean?
unicornmama 4y ago
This is spot on. What worked in the last 10, 20 or 30 years isn’t guaranteed to continue to work. Market cycles, if it does cycle, is closer to 100 years than mere decades. ETFs, 60/40, 4%, etc. have become a cult mantra that blinds investors to critically consider alternative realities.
imtringued 4y ago
Nothing has changed. There is still an abundance of capital. Interest rates have known only one direction and that is down.
- cableshaft 4y ago
  You do know the Fed has been raising rates all year, and have signaled they will keep doing it through the end of this year, right? Or are you suggesting on a long enough timeline it's just going to go right back to zero again? If so, then yeah you might be right there. At least the US never got down to negative interest rates, like they've had in europe for the past eight years. I can't imagine having money being taken away for parking it in a 'savings account' (of course inflation is practically the same thing, but negative interest rates still seem worse to me, especially since they also have high inflation over there right now).

landemva 4y ago

>> there's an abundance of dollars Slightly different perspective here - there is an abundance of debt that spends like dollars. Government debt and some pension debt is nearly unserviceable in some States and countries, so there will be a dollar short squeeze in attempt to get dollars to pay the debt. Yep, seems counter-intuitive at first glance that the USD short squeeze will increase the dollar appetite.

bmitc 4y ago

What do you suggest?

UkrainianJew 4y ago
Bonds might become a thing again with the interest rates above 3%.
- stocknoob 4y ago
  Bonds will take a hit if interest rates keep rising. (Look at how they’ve done year to date.) If you want to actually hedge your investments, use a collar. https://www.investopedia.com/articles/active-trading/011515/how-protective-collar-works.asp https://www.investopedia.com/articles/active-trading/011515/...
  - UkrainianJew 4y ago
    Existing long-term bonds take a hit. Because if today you can get a 6% bond maturing in 2030, nobody will buy your 3% bond unless you price it down accordingly. But if you keep getting them in 1-year increments as long as you expect the rates to rise, you just keep cashing out at maturity and reinvesting at the yield rate of the day.

jliptzin 4y ago

There have been a ton of real technological advances since 2008 that is not just on paper. You could have also said the exact same thing in 2000.

UkrainianJew 4y ago
Kinda, but a lot of them are about manufacturing more cheap stuff in China. Most technological advances not involving that are about skirting the regulations/antitrust laws (AirBnB, Uber, Google Ads) or using dark patterns to manipulate attention (Meta).
- jliptzin 4y ago
  You are distracted by clickbait news and ignoring important advances made since 2008, a few examples which is just scratching the surface because there is a ton I am personally not even aware of: * Greatly reduced cost of solar panels and batteries * Things like uber/doordash made taxis / takeout way more efficient * Transitioning to electric vehicles. In 2008 I'd pay $50/week for fuel, now I pay $10/week to travel the same distance in my electric car. Not to mention savings in oil changes/maintenance * mRNA vaccines nonexistent in 2008 * Significant progress towards autonomous vehicles, if that comes to fruition on a large scale it will transform our society

synu 4y ago

Something beyond a regression to the mean?

unicornmama 4y ago

This is spot on. What worked in the last 10, 20 or 30 years isn’t guaranteed to continue to work. Market cycles, if it does cycle, is closer to 100 years than mere decades. ETFs, 60/40, 4%, etc. have become a cult mantra that blinds investors to critically consider alternative realities.

imtringued 4y ago

Nothing has changed. There is still an abundance of capital. Interest rates have known only one direction and that is down.

cableshaft 4y ago
You do know the Fed has been raising rates all year, and have signaled they will keep doing it through the end of this year, right? Or are you suggesting on a long enough timeline it's just going to go right back to zero again? If so, then yeah you might be right there. At least the US never got down to negative interest rates, like they've had in europe for the past eight years. I can't imagine having money being taken away for parking it in a 'savings account' (of course inflation is practically the same thing, but negative interest rates still seem worse to me, especially since they also have high inflation over there right now).