3 ms·

Don't keep cash or cash-based assets. Only what you need for personal liquidity and emergencies. The govt will steal your money through inflation. If you don't

Don't keep cash or cash-based assets. Only what you need for personal liquidity and emergencies. The govt will steal your money through inflation. If you don't wanna mess with or don't have enough money saved to buy real estate, buy an index ETF or a real estate fund.

hn8305823 3y ago
It's good to keep at least 1 year of salary in savings. Investing it in other assets can be problematic when the global macro environment falters because you won't be the only one trying to liquidate! It's not hard to imagine a scenario where the stock market and risk assets in general crash, and then you get laid off.
rrrrrrrrrrrryan 3y ago
A 90/10 stocks/bonds portfolio will outperform a 100/0 portfolio over the long term. During a market downturn money flees to safety, bonds appreciate, stocks fall, and when you rebalance back to 90/10 you'll effectively be buying stocks at a discount. The 100/0 guy has no such option and misses out entirely.
- velcrovan 3y ago
  > The 100/0 guy has no such option and misses out entirely. Not true. The 100/0 guy can buy stocks during a downturn just as well as the 90/10 guy. If we're really talking long term, that is, if neither person is selling, and if both are investing the same amounts regularly, then on average the 100/0 portfolio will outperform the 90/10 portfolio. Looking at history, the reason to go with anything besides 100/0 over the long term has to do with risk tolerance, not performance. https://investor.vanguard.com/investor-resources-education/education/model-portfolio-allocation https://investor.vanguard.com/investor-resources-education/e...
  - naniwaduni 3y ago
    Most people can't do 100/0 because they're structurally overweighted on a single weird illiquid asset that pays out more distributions than the rest of their assets combined.

3 ms·

Don't keep cash or cash-based assets. Only what you need for personal liquidity and emergencies. The govt will steal your money through inflation. If you don't

by rmbyrro 3y ago

hn8305823 3y ago
It's good to keep at least 1 year of salary in savings. Investing it in other assets can be problematic when the global macro environment falters because you won't be the only one trying to liquidate! It's not hard to imagine a scenario where the stock market and risk assets in general crash, and then you get laid off.
rrrrrrrrrrrryan 3y ago
A 90/10 stocks/bonds portfolio will outperform a 100/0 portfolio over the long term. During a market downturn money flees to safety, bonds appreciate, stocks fall, and when you rebalance back to 90/10 you'll effectively be buying stocks at a discount. The 100/0 guy has no such option and misses out entirely.
- velcrovan 3y ago
  > The 100/0 guy has no such option and misses out entirely. Not true. The 100/0 guy can buy stocks during a downturn just as well as the 90/10 guy. If we're really talking long term, that is, if neither person is selling, and if both are investing the same amounts regularly, then on average the 100/0 portfolio will outperform the 90/10 portfolio. Looking at history, the reason to go with anything besides 100/0 over the long term has to do with risk tolerance, not performance. https://investor.vanguard.com/investor-resources-education/education/model-portfolio-allocation https://investor.vanguard.com/investor-resources-education/e...
  - naniwaduni 3y ago
    Most people can't do 100/0 because they're structurally overweighted on a single weird illiquid asset that pays out more distributions than the rest of their assets combined.