5 ms·

People have no idea what to do with their money right now

mjr00 1y ago
Yep! The only thing anyone knows for "sure" is that cash is an absolutely terrible place to keep your money right now. Any kind of asset is better.
- andrewmcwatters 1y ago
  This isn't true. You're all implicitly claiming that all assets return nominal value above inflation, which isn't even remotely true when we teach it to pimple-faced undergraduate students.
  - Pooge 1y ago
    This has been true ever since cash supply was controlled by central banks.
    - andrewmcwatters 1y ago
      This also isn't true.
      - Pooge 1y ago
        Cash loses value every year. This has been true for every currency. We don't have late 20th century inflation but people who know basic personal finance do not want to hold too much cash right now.
        andrewmcwatters 1y ago
        Equities also lose and gain value. There's a reason to hold cash when it's preferrable to lose real, time and inflation-adjusted, value versus losing to speculative equities or other securities. But go ahead, downvote me since you and the rest seem to think any asset is better than cash. Which, of course, once again, isn't true. You can buy bonds with real coupon rates worse than inflation; you can buy speculative equities whose YoY return nets negative. But yeah, cash is bad, cash is bad. Buy assets no matter the value! Go buy Pokémon cards! Right? I mean you guys are so smart, why hold cash? That's basic personal finance! I bet you also like to tell people "don't time the market, it's time in the market," right? There's no such thing as the "Lost Decades," that's a spooky Halloween story. In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. What about real estate, huh? How about AirBnB? That better enough than cash for you? Not a fan of real estate? How about Warner Bros Discovery? Yeah? That better than cash? You could have lost money constantly on GameStop, but wait, there's more, you can go still lose money on it today! Why hold cash?
        Pooge 1y ago
        > I bet you also like to tell people "don't time the market, it's time in the market," right? That's right. > In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. You're either trolling me or don't know anything about modern personal finance. If you're willing to get out of your cave and open your worldview a little bit, I recommend reading the Bogleheads wiki. Your argument is also flawed, as cash still lost some of its value. As it always did. Also, comparing cash to investment in specific companies stock is an unfair comparison. USD vs S&P500 index is a fairer comparison. It's fine if you yourself prefer to hold cash for whatever personal reasons you have, but please stop talking nonsense. A comparison of any currency in the world vs a roughly diversified index would invalidate all your points.
        deleted 1y ago
        [deleted]
        andrewmcwatters 1y ago
        > It's fine if you yourself prefer to hold cash for whatever personal reasons you have, but please stop talking nonsense. A comparison of any currency in the world vs a roughly diversified index would invalidate all your points. No, it wouldn't.
        immibis 1y ago
        Buying or selling stock is always timing the market.
        Pooge 1y ago
        Absolutely not. Most of the investors are regular people who need the money for their retirement. They sell stock when they need the money to live. Stop thinking that investment is like in the movies where everyone watches their portfolio value 24/7, please.
        immibis 1y ago
        immibis 1y ago
        Cash loses value at a relatively predictable rate. Equities and other assets gain and lose value at unpredictable rates. There are different rates and different predictabilities. When investors are happy, equities skyrocket to the moon; when investors are unhappy, they crash. US equities in the last 100ish years had an amazing upwards run that is atypical of anywhere else, anywhen else, or any other asset class; is that expected to continue or is it just survivor bias? Stocks tend to go upwards much more than cash, in the long term, even accounting for crashes. But those crashes are still big. IIRC, if you buy right after a big crash, you get about twice as much stock for the same price, and skip ahead 10 years (25% of the complete duration of the game) compared to someone who bought right before. I haven't run the numbers but I'm assuming that means it's worth holding only cash for 10 years if you're sure there will definitely be a crash some time in that 10 years. That's a best case scenario but 10 years of retirement is not something to be gambled lightly. also, is Bitcoin a currency?
        Pooge 1y ago
        > it's worth holding only cash for 10 years if you're sure there will definitely be a crash some time in that 10 years Oh, because you know for sure that there will be a crash in the next 10 years? A prediction like that alone is worth billions, and I honestly doubt that you're different from the thousands of other who advocated for the same thing since the last 50 years. In real life, an investor starts to keep assets that aren't as volatile but still aren't cash (e.g. bonds) as he approaches retirement. But even then, if they retire officially (i.e. at 65) then they probably have a national pension to draw from anyway. > also, is Bitcoin a currency? I don't care about cryptocurrencies at all, but it is the same classification as gold. People use it to speculate and reassure themselves thinking that "if it goes bad, it will preserve my wealth" and it doesn't have any value except when you trade it with someone for a usable currency.
    - array_key_first 1y ago
      No, because while cash loses value, so do many assets. Simply putting money into assets instead of cash doesn't mean you make more money. You might, but you might also lose more money.
      - andrewmcwatters 1y ago
        [flagged]
        dang 1y ago
        You can't attack other users like this here. Since we've asked you many times to stop breaking HN's guidelines and you've continued to do it, I've banned the account. If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. They're here: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.
      - Pooge 1y ago
        > Simply putting money into assets instead of cash doesn't mean you make more money I never said that. Cash loses money by design. This is not true of any other asset, for obvious reasons. However, diversified indexes have historically always outperformed cash especially if we compare long intervals.
        andrewmcwatters 1y ago
        No, they haven't. You're thinking specifically about how the US market has been lucky enough for that to occur. There is absolutely nothing intrinsic about that happening as a guarantee. Look at other countries' stock exchanges. There have also been periods of time in US history where your equities would have lost catastrophic value as you were ready to retire and all of a sudden you wouldn't have been able to draw down on your retirement without a blend of income from somewhere else.
        Pooge 1y ago
  - otterley 1y ago
    Cash is not an investment. Cash is a wealth store.
    - immibis 1y ago
      When you get down into the details, they're all just "things you can own" and the categories like "investment" and "wealth store" start to look very made up.
    - sph 1y ago
      Cash is a medium of exchange, not a wealth store. What wealth do you store if it doesn’t even keep up with inflation?
      - otterley 1y ago
        I didn't say it was a good wealth store. ;-) But yes, it is a medium of exchange, too.
- oarla 1y ago
  If you have cash, it may be a good idea to buy in this small downturn. Though I expect there will be more buying opportunities in the coming year.
skatingaway 1y ago
Huh? The fundamentals have not changed. If you’re that lost then close Reddit and hire an RIA.
immibis 1y ago
Which is a sign the government has printed way too much money. What are they doing to fix it? Printing more... There's actually an imbalance going on - the government has printed way too much money towards the stock market, and way too little towards the basics of a stable society, which is why there are symptoms of too much money and too little money simultaneously.

Yep! The only thing anyone knows for "sure" is that cash is an absolutely terrible place to keep your money right now. Any kind of asset is better.

andrewmcwatters 1y ago
This isn't true. You're all implicitly claiming that all assets return nominal value above inflation, which isn't even remotely true when we teach it to pimple-faced undergraduate students.
- Pooge 1y ago
  This has been true ever since cash supply was controlled by central banks.
  - andrewmcwatters 1y ago
    This also isn't true.
    - Pooge 1y ago
      Cash loses value every year. This has been true for every currency. We don't have late 20th century inflation but people who know basic personal finance do not want to hold too much cash right now.
      - andrewmcwatters 1y ago
        Equities also lose and gain value. There's a reason to hold cash when it's preferrable to lose real, time and inflation-adjusted, value versus losing to speculative equities or other securities. But go ahead, downvote me since you and the rest seem to think any asset is better than cash. Which, of course, once again, isn't true. You can buy bonds with real coupon rates worse than inflation; you can buy speculative equities whose YoY return nets negative. But yeah, cash is bad, cash is bad. Buy assets no matter the value! Go buy Pokémon cards! Right? I mean you guys are so smart, why hold cash? That's basic personal finance! I bet you also like to tell people "don't time the market, it's time in the market," right? There's no such thing as the "Lost Decades," that's a spooky Halloween story. In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. What about real estate, huh? How about AirBnB? That better enough than cash for you? Not a fan of real estate? How about Warner Bros Discovery? Yeah? That better than cash? You could have lost money constantly on GameStop, but wait, there's more, you can go still lose money on it today! Why hold cash?
        Pooge 1y ago
        > I bet you also like to tell people "don't time the market, it's time in the market," right? That's right. > In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. You're either trolling me or don't know anything about modern personal finance. If you're willing to get out of your cave and open your worldview a little bit, I recommend reading the Bogleheads wiki. Your argument is also flawed, as cash still lost some of its value. As it always did. Also, comparing cash to investment in specific companies stock is an unfair comparison. USD vs S&P500 index is a fairer comparison. It's fine if you yourself prefer to hold cash for whatever personal reasons you have, but please stop talking nonsense. A comparison of any currency in the world vs a roughly diversified index would invalidate all your points.
        deleted 1y ago
        [deleted]
        andrewmcwatters 1y ago
        > It's fine if you yourself prefer to hold cash for whatever personal reasons you have, but please stop talking nonsense. A comparison of any currency in the world vs a roughly diversified index would invalidate all your points. No, it wouldn't.
        immibis 1y ago
        Buying or selling stock is always timing the market.
        Pooge 1y ago
        Absolutely not. Most of the investors are regular people who need the money for their retirement. They sell stock when they need the money to live. Stop thinking that investment is like in the movies where everyone watches their portfolio value 24/7, please.
        immibis 1y ago
      - immibis 1y ago
        Cash loses value at a relatively predictable rate. Equities and other assets gain and lose value at unpredictable rates. There are different rates and different predictabilities. When investors are happy, equities skyrocket to the moon; when investors are unhappy, they crash. US equities in the last 100ish years had an amazing upwards run that is atypical of anywhere else, anywhen else, or any other asset class; is that expected to continue or is it just survivor bias? Stocks tend to go upwards much more than cash, in the long term, even accounting for crashes. But those crashes are still big. IIRC, if you buy right after a big crash, you get about twice as much stock for the same price, and skip ahead 10 years (25% of the complete duration of the game) compared to someone who bought right before. I haven't run the numbers but I'm assuming that means it's worth holding only cash for 10 years if you're sure there will definitely be a crash some time in that 10 years. That's a best case scenario but 10 years of retirement is not something to be gambled lightly. also, is Bitcoin a currency?
        Pooge 1y ago
        > it's worth holding only cash for 10 years if you're sure there will definitely be a crash some time in that 10 years Oh, because you know for sure that there will be a crash in the next 10 years? A prediction like that alone is worth billions, and I honestly doubt that you're different from the thousands of other who advocated for the same thing since the last 50 years. In real life, an investor starts to keep assets that aren't as volatile but still aren't cash (e.g. bonds) as he approaches retirement. But even then, if they retire officially (i.e. at 65) then they probably have a national pension to draw from anyway. > also, is Bitcoin a currency? I don't care about cryptocurrencies at all, but it is the same classification as gold. People use it to speculate and reassure themselves thinking that "if it goes bad, it will preserve my wealth" and it doesn't have any value except when you trade it with someone for a usable currency.
  - array_key_first 1y ago
    No, because while cash loses value, so do many assets. Simply putting money into assets instead of cash doesn't mean you make more money. You might, but you might also lose more money.
    - andrewmcwatters 1y ago
      [flagged]
      - dang 1y ago
        You can't attack other users like this here. Since we've asked you many times to stop breaking HN's guidelines and you've continued to do it, I've banned the account. If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. They're here: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.
    - Pooge 1y ago
      > Simply putting money into assets instead of cash doesn't mean you make more money I never said that. Cash loses money by design. This is not true of any other asset, for obvious reasons. However, diversified indexes have historically always outperformed cash especially if we compare long intervals.
      - andrewmcwatters 1y ago
        No, they haven't. You're thinking specifically about how the US market has been lucky enough for that to occur. There is absolutely nothing intrinsic about that happening as a guarantee. Look at other countries' stock exchanges. There have also been periods of time in US history where your equities would have lost catastrophic value as you were ready to retire and all of a sudden you wouldn't have been able to draw down on your retirement without a blend of income from somewhere else.
        Pooge 1y ago
- otterley 1y ago
  Cash is not an investment. Cash is a wealth store.
  - immibis 1y ago
    When you get down into the details, they're all just "things you can own" and the categories like "investment" and "wealth store" start to look very made up.
  - sph 1y ago
    Cash is a medium of exchange, not a wealth store. What wealth do you store if it doesn’t even keep up with inflation?
    - otterley 1y ago
      I didn't say it was a good wealth store. ;-) But yes, it is a medium of exchange, too.
oarla 1y ago
If you have cash, it may be a good idea to buy in this small downturn. Though I expect there will be more buying opportunities in the coming year.

skatingaway 1y ago

Huh? The fundamentals have not changed. If you’re that lost then close Reddit and hire an RIA.

immibis 1y ago

Which is a sign the government has printed way too much money. What are they doing to fix it? Printing more... There's actually an imbalance going on - the government has printed way too much money towards the stock market, and way too little towards the basics of a stable society, which is why there are symptoms of too much money and too little money simultaneously.