by soferio on 3/10/22, 7:56 PM with 64 comments
by yulaow on 3/10/22, 10:29 PM
I am looking at least to 20years from now before withdrawing something.
I don't know how much will last this inflation period, how big it will go, how it will affect the stock/crypto/bond market, whatever other "it will happen only every 50 years" absurd event will happen in the next years after a pandemic and a (let's hope almost) world war 3, etc... So it makes no sense to change my investment strat now if I can't even predict the situation in 3 months.
by awb on 3/10/22, 8:36 PM
The more utility and stability, the safer the investment. The more speculative or novel, the riskier the investment.
Real estate and property are typically pretty safe and have some utility.
As are bonds (but most might not keep up with high inflation, just dampen the effects).
Novel assets like crypto, NFTs, etc. will likely produce higher variability in returns (either positive or negative).
by Mezzie on 3/10/22, 10:03 PM
The more of a safety net I enable to exist here, the more likely it will be here when I need it, and the more connections I make here now, the more likely it is someone will catch me when I fall.
If you're JUST talking financial return (versus safety, hence my decision), it's entirely dependent on your timeline. Do you need to pull out in 1 year? 5? 20? 50? They all require different strategies.
by dilippkumar on 3/10/22, 8:44 PM
1. There is something meaningful/profitable that you can do with the borrowed money
2. Your credibility allows you to buy a loan at cheap prices
3. Your inflation predictions are accurate
4. Your loan’s terms keep the interest rate fixed at a rate less than the inflation you expect
As for myself, I don’t think I can put extra capital to profitable use right now, so I’m not going to be borrowing any money.
by anm89 on 3/10/22, 10:26 PM
I would argue real estate isn't as much of a sure things as some people suggest as it could be rate sensitive and it could correlate with equity markets over the long term.
by exolymph on 3/10/22, 8:37 PM
Most of all invest in your community and relationships. Those are always the best prep, whether we're talking financial or disaster preparedness.
by next_xibalba on 3/12/22, 4:09 PM
- Gold
- The Yield Curve (long US2Y, short US10Y)
- NASDAQ 100
- Bitcoin
- US cyclicals (long)/US defensive (short)
- AUDJPY
- TIPS (Treasury Inflation-Protected Securities)
- GSCI (Goldman Sachs Commodity Index)
- JPM Emerging Market Currency Index
Another is that TIPS are disputed as a good inflation hedge. One reason for this is that they are indexed to the CPI, which, some argue, significantly understates real inflation.
With inflation already raging, the upside on these bets might not be great if placed in March 2022. Of course, if you expect high inflation to be persistent, these may still be viable.
[1] https://www.docdroid.net/H1fuimX/the-great-monetary-inflatio...
by tacostakohashi on 3/11/22, 11:53 AM
For that reason, all the best ways to deal with inflation have just shot up in price to the point where yields are unattractive.
It's like asking "where do I get a cheap umbrella now that it's raining?", it's basically too late, the trick is to account for the risk before it is realized.
by muzani on 3/10/22, 9:19 PM
Starting a business becomes substantially less risk than taking a job.
Some people would say buy property etc and you can just raise rent along with inflation. But it doesn't necessarily work that way; the prices may actually go up slower than inflation.
by notjustanymike on 3/11/22, 12:35 AM
by lazerpants on 3/10/22, 9:26 PM
I chose Gemini because of their NY state compliance and their attempts to be compliant ahead of government regulation. I still wouldn't put all of my money in Gemini but it is a highly liquid, high-yielding, way to diversify and get some yield.
Full disclosure: I do stand to benefit from Gemini's success due to associates having equity, but I used GUSD and Gemini Earn prior to having that connection.
by tbirdz on 3/11/22, 3:16 AM
by sglazer on 3/12/22, 2:33 AM
by Bostonian on 3/10/22, 9:27 PM
by h0p3 on 3/11/22, 2:58 AM
by lmedinas on 3/10/22, 8:08 PM
by aynyc on 3/10/22, 10:21 PM
by andrewmcwatters on 3/10/22, 9:55 PM
Well it's ever persistent for everyone, and if everyone is buying, it's not impossible to purchase something beyond its fair value.
For instance, if you bought into US equities on Feb 10th, you would have lost over 24% by March 23rd. If you held it until now, you would have made back your losses... but if you bought broad equities on EOY 2021, you would have lost more than inflation up to this point in 2022.
Ray Dalio mentioned his confusion about markets not crashing when he was young because the dollar became untethered from gold a second time in U.S. history, and he later realized buying assets when central banks print was a "rhyme" in economics history--these events don't repeat perfectly, but similar situations occur over time. In his case, it was a repeat event.
But I hate with a passion when people talk about generally what you should do without ever talking about mechanical limits to that type of decision making.
It's so pervasive that you get studies put out by financial institutions saying you're better to always be fully invested, and to never set aside cash. Could you elaborate on that? Or is it because you're an institution getting paid on expense ratios based on AUM.
The whole attitude industry-wide is gross and conflicting to me.
If you refused to buy when general equities were historically high at any point in time and held on to cash while eating inflation, when market prices came down and you bought when valuations were fair value you would have made money, you didn't lose it simply because inflation was present. It always is. But you have a choice of whether you want to buy a dollar of assets for two, or if you want to buy a dollar of assets for 80 cents. That's NOT MARKET TIMING. That's refusing to buy something when it's overvalued, but people so grossly conflate the two that you can't have any reasonable discussion with a layperson about this concept because catch-all sayings predominantly reside in average investors' minds over studies and historic figures about asset management.
Buy low, sell high! Buy and hold forever! Yeah, but what is "high"? And why would you hold something that is dying?
I feel like the pop literature available to the public that is digestible covers some reasonable concepts but I think there are studies that either haven't been independently recreated to back simple common questions for the above average person, or they haven't been performed at all.
by m1117 on 3/10/22, 8:21 PM
by rdtwo on 3/10/22, 8:07 PM
by fuzzfactor on 3/13/22, 3:32 AM
by lolive on 3/11/22, 12:47 PM
[does money have other relevant purposes?]