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I'm sorry but for your run of the mill private investor that's awful advice. Unless you know what you're doing and have a very strong understanding of the inves

by corford 13y ago

I'm sorry but for your run of the mill private investor that's awful advice. Unless you know what you're doing and have a very strong understanding of the investment, you are almost _always_ better off sticking your money in a fund (i.e. outsourcing the expertise to someone who does know what they're doing). Any investment involves risk taking but that doesn't mean you should just throw your hands up in the air and double down on 16 red.

wpietri 13y ago
You are taking advice that I didn't give. I didn't say that all risk was good, just that waiting until there is zero apparent risk is futile.
- corford 13y ago
  Of course it's futile. It doesn't mean you shouldn't do as much homework as possible to reduce the chances of an unknown unknown wiping you out (unless you just like a straight gamble, which is fine too).
  - wpietri 13y ago
    I'm glad to hear we agree completely.
bryanlarsen 13y ago
Sticking all your investments in a fund is pretty awful advice too. A fairly diversified stock fund is made up of a bunch of risky investments that are all fairly highly correlated. Pretty much all investment advice is based on the history of American stock markets over the last one hundred years, which is anomalous globally and not a lot of history for the typical investment horizon of 20-50 years. Why the US? Risks add funny. That's why you're always told to put 15% of your investments in bonds. It's not because bonds are less risky than stocks, but because they are counter-cyclical and less correlated. For the same reasons, putting a small amount of your wealth into very risky investments such as bitcoin can reduce your overall risk.
- corford 13y ago
  Sorry I was being a bit sloppy. The point I was trying to make was that most people are better off outsourcing investment decisions to someone with more expertise than themselves unless they want to invest in an area they know particularly well. And if you have a good financial advisor the first thing he will tell you to do is diversify :)
  - bryanlarsen 13y ago
    My basic point is that you're probably a lot less diversified than your financial advisor says you are. I'm not going to bet against American hegemony extending for the next 50 years, but I'm certainly going to hedge against it...

by corford 13y ago

wpietri 13y ago

You are taking advice that I didn't give. I didn't say that all risk was good, just that waiting until there is zero apparent risk is futile.

corford 13y ago
Of course it's futile. It doesn't mean you shouldn't do as much homework as possible to reduce the chances of an unknown unknown wiping you out (unless you just like a straight gamble, which is fine too).
- wpietri 13y ago
  I'm glad to hear we agree completely.

bryanlarsen 13y ago

Sticking all your investments in a fund is pretty awful advice too. A fairly diversified stock fund is made up of a bunch of risky investments that are all fairly highly correlated. Pretty much all investment advice is based on the history of American stock markets over the last one hundred years, which is anomalous globally and not a lot of history for the typical investment horizon of 20-50 years. Why the US? Risks add funny. That's why you're always told to put 15% of your investments in bonds. It's not because bonds are less risky than stocks, but because they are counter-cyclical and less correlated. For the same reasons, putting a small amount of your wealth into very risky investments such as bitcoin can reduce your overall risk.

corford 13y ago
Sorry I was being a bit sloppy. The point I was trying to make was that most people are better off outsourcing investment decisions to someone with more expertise than themselves unless they want to invest in an area they know particularly well. And if you have a good financial advisor the first thing he will tell you to do is diversify :)
- bryanlarsen 13y ago
  My basic point is that you're probably a lot less diversified than your financial advisor says you are. I'm not going to bet against American hegemony extending for the next 50 years, but I'm certainly going to hedge against it...