5 ms·

If it's a bubble as a programmer is there anything I can do about it or do differently? I don't have any shares.

betterunix 13y ago
General advice: 1. Settle your debts soon. Losing your job does not mean losing your debts. 2. If you have no debts, save your money with low-risk investments (or a bank account, but then you are probably losing to inflation). If you lose your job you will still need to have some money available.
- textminer 13y ago
  What's the best way for an average person to invest? Can and should ones buy index fund, or just lower-risk hedge funds?
  - Patrick_Devine 13y ago
    Usually money retreats from the equities markets to the bond markets when bubbles pop. The bond markets are a lot less sexy, but they offer a coupon (tech equities almost never offer a dividend), and the value of the bond will often rise above the face value of the bond when people are scrambling to find a safe place to park their money. Just look for some bond funds which have had reasonable performance through the last few bubbles if you don't want to invest directly into bonds. You can also do a bond ladder, but some people advise against them. EDIT: changed "usually" to "often" when describing the value of a bond
  - enoch_r 13y ago
    1. Figure out your risk profile--if you're young and won't need to use your savings for a while, you can take a lot more risks. 2. Your risk profile determines the ratio of stocks to bonds that you want to invest in. Stocks are higher risk, but they've historically given much higher returns than bonds. One bit of classic investment advice is "put {your age}% in bonds, everything else in stocks." 3. Buy index funds or ETFs. For longer term, ETFs are a better deal, and while supposedly less "convenient," it really isn't hard to open an account with an online broker and buy ETFs. You have a lot of options here, but the S&P500 is the standard. You could put some percentage into emerging markets, small-caps, etc. The nice thing about ETF's, or index funds for that matter, is that they're partially diversified by nature, so unless you really try you're not going to get a portfolio that's highly susceptible to one particular type of risk. Remember that every time you trade you're probably paying a brokerage fee, though--if you pay an $8 fee on a $1000 investment, that's almost 1% gone--a few months of expected returns! 4. Repeat as you save money. 5. Ignore all market advice, news that "X is a bubble," "Y is about to crash," "Z is about to take off," etc. People who are consistently right about this sort of thing are making billions in the stock market, not writing blog posts or newspaper columns. And even if they are working on Wall St, it's difficult to tell the difference between luck and acumen. If returns were purely random, with nothing called "skill," we'd be statistically quite likely to see someone like Warren Buffett--who has beaten the market consistently--just like we're statistically quite likely to see someone win the lottery. Buy and hold, only sell to spend. That's the only strategy you follow! 6. Exception to 5: if you like to gamble. :) There's nothing wrong with having a "fun" investment or two, as long as you know that they're a consumption good and don't really count on keeping them.
  - pnathan 13y ago
    The cheapest way with the least gotchas is index funds tracking broad market performance via ETFs. Dump money in regularly and forget about it In any event, carefully monitor your expenses vs. ROI. Know how much transaction fees are, how much the fund takes, etc. In my reading, I found mutual funds to have many costs; this is why I went ETF. (disclosure: I own only ETFs at this point)
gaius 13y ago
Pay off your debts, put some aside, and practice living cheaply. Learn to cook, specifically learn to make hearty meals with cheap ingredients. Re-sole your shoes rather than buying a new pair. Put off a new laptop, phone, etc for an extra year. Specifically as s programmer, look at your skills, and make sure you are good at something that has high barriers to entry and sustained demand. Some people call this "legacy", but I call it "bread and butter".
michaelochurch 13y ago
My (perhaps contrary) view: programmer salaries for the 99% are not really inflated. Yes, there are rock stars (usually managers) getting $250k signing bonuses, but they're not the norm. I think that average software engineers ($70-175k, depending on experience) aren't going to see an appreciable drop in pay or job availability. Keep building your skill base and stay the course. It takes weeks (for people with marketing acumen) to make the next hot thing but years to build a technical skill base. The latter has less risk, so that's what you should do. If your career and job conflict, invest in your career, because your job can end at any time. (This advice applies always, not just in late-bubble times.) Divide your time (if you can) between high-level/front-end and low-level/back-end work. The former's good because it makes it easier to get to demos quickly, and communicate ideas in a slick, technological way; the latter, however, is a lot more stable. C and linear algebra and Lisp (the idea) don't change as much over 5 years as web tools. There is a bubble but it's not nearly as bad as the one in the late '90s, and I don't think it's going to wipe out the whole software industry-- it'll just slow down some parts of it.

General advice: 1. Settle your debts soon. Losing your job does not mean losing your debts. 2. If you have no debts, save your money with low-risk investments (or a bank account, but then you are probably losing to inflation). If you lose your job you will still need to have some money available.

textminer 13y ago
What's the best way for an average person to invest? Can and should ones buy index fund, or just lower-risk hedge funds?
- Patrick_Devine 13y ago
  Usually money retreats from the equities markets to the bond markets when bubbles pop. The bond markets are a lot less sexy, but they offer a coupon (tech equities almost never offer a dividend), and the value of the bond will often rise above the face value of the bond when people are scrambling to find a safe place to park their money. Just look for some bond funds which have had reasonable performance through the last few bubbles if you don't want to invest directly into bonds. You can also do a bond ladder, but some people advise against them. EDIT: changed "usually" to "often" when describing the value of a bond
- enoch_r 13y ago
  1. Figure out your risk profile--if you're young and won't need to use your savings for a while, you can take a lot more risks. 2. Your risk profile determines the ratio of stocks to bonds that you want to invest in. Stocks are higher risk, but they've historically given much higher returns than bonds. One bit of classic investment advice is "put {your age}% in bonds, everything else in stocks." 3. Buy index funds or ETFs. For longer term, ETFs are a better deal, and while supposedly less "convenient," it really isn't hard to open an account with an online broker and buy ETFs. You have a lot of options here, but the S&P500 is the standard. You could put some percentage into emerging markets, small-caps, etc. The nice thing about ETF's, or index funds for that matter, is that they're partially diversified by nature, so unless you really try you're not going to get a portfolio that's highly susceptible to one particular type of risk. Remember that every time you trade you're probably paying a brokerage fee, though--if you pay an $8 fee on a $1000 investment, that's almost 1% gone--a few months of expected returns! 4. Repeat as you save money. 5. Ignore all market advice, news that "X is a bubble," "Y is about to crash," "Z is about to take off," etc. People who are consistently right about this sort of thing are making billions in the stock market, not writing blog posts or newspaper columns. And even if they are working on Wall St, it's difficult to tell the difference between luck and acumen. If returns were purely random, with nothing called "skill," we'd be statistically quite likely to see someone like Warren Buffett--who has beaten the market consistently--just like we're statistically quite likely to see someone win the lottery. Buy and hold, only sell to spend. That's the only strategy you follow! 6. Exception to 5: if you like to gamble. :) There's nothing wrong with having a "fun" investment or two, as long as you know that they're a consumption good and don't really count on keeping them.
- pnathan 13y ago
  The cheapest way with the least gotchas is index funds tracking broad market performance via ETFs. Dump money in regularly and forget about it In any event, carefully monitor your expenses vs. ROI. Know how much transaction fees are, how much the fund takes, etc. In my reading, I found mutual funds to have many costs; this is why I went ETF. (disclosure: I own only ETFs at this point)

gaius 13y ago

Pay off your debts, put some aside, and practice living cheaply. Learn to cook, specifically learn to make hearty meals with cheap ingredients. Re-sole your shoes rather than buying a new pair. Put off a new laptop, phone, etc for an extra year. Specifically as s programmer, look at your skills, and make sure you are good at something that has high barriers to entry and sustained demand. Some people call this "legacy", but I call it "bread and butter".

michaelochurch 13y ago

My (perhaps contrary) view: programmer salaries for the 99% are not really inflated. Yes, there are rock stars (usually managers) getting $250k signing bonuses, but they're not the norm. I think that average software engineers ($70-175k, depending on experience) aren't going to see an appreciable drop in pay or job availability. Keep building your skill base and stay the course. It takes weeks (for people with marketing acumen) to make the next hot thing but years to build a technical skill base. The latter has less risk, so that's what you should do. If your career and job conflict, invest in your career, because your job can end at any time. (This advice applies always, not just in late-bubble times.) Divide your time (if you can) between high-level/front-end and low-level/back-end work. The former's good because it makes it easier to get to demos quickly, and communicate ideas in a slick, technological way; the latter, however, is a lot more stable. C and linear algebra and Lisp (the idea) don't change as much over 5 years as web tools. There is a bubble but it's not nearly as bad as the one in the late '90s, and I don't think it's going to wipe out the whole software industry-- it'll just slow down some parts of it.