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Ask HN: How to prosper under negative interest rates?

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Re: Ask HN: How to prosper under negative interest rates?

#251

Post by throw51319 »

benjohnson wrote: post #7

My opinion: Creating value is still worthwhile - no matter what is going on with the currency, it's still used for exchange. So if you're creating value you'll be fine. A friendly reminder: value is determined by the customer. For myself, I am betting that tangible assets that provide value would be preferable to assets that just sit there. Value investing and prudent real-estate are where I'll be concentrating my ef…

Yup that is the key. Don't spend too much mental energy on the markets unless you think you found your niche. Invest and do some swing trading and spend most of your mental energy on learning how to create value.

The most immediate value creation for most of us is to just become better developers and better understanders of the requirements of whatever we're developing.

Re: Ask HN: How to prosper under negative interest rates?

#252

Post by shawnz »

fierarul wrote: post #250
shawnz wrote: post #105

Earlier quoted context omitted.

> That said, it's very hard to time the market, so the best strategy is to put your money in over time. One good way to do this is to take a set amount of money from each paycheck and invest it every pay period, regardless of what the market is at. If you have a bunch of money sitting in savings right now, maybe divide it into 52 parts (or 104 or 156 or even 208 depending on your risk tolerance and/or thoughts on how…

It is counterintuitive since the default explanation about DCA is that one will ride highs and lows for a good average return. I'll have to read that paper.

> that one will ride highs and lows for a good average return.

That's what happens if you invest lump sum -- you get the average, which is usually good because of the upwards trend of the market (due to the market risk premium).

When you DCA, you need to think about all the money that's NOT invested during that time, being lost to inflation. Essentially you are betting against the market with that fraction of your money over the period you do the DCA. But it's not obvious that that's whats happening because when you are in the process of doing DCA, it "feels" like it's all invested to some degree.

If you want something that's lower risk than the stock market, then you can just go with an asset allocation that's less than 100% equities and just stick with it. But there is no reason to change your asset allocation over time if your financial situation is not changing (assuming you can't time the market), yet that is basically what DCA does.

Re: Ask HN: How to prosper under negative interest rates?

#253

Post by mancerayder »

relaxing wrote: post #248
mancerayder wrote: post #161

Earlier quoted context omitted.

Anecdotal - Citizen App blowing up, in several neighborhoods I know well. A large number of street robberies, gunshots heard. Unusual events, like a deadly assault during the afternoon in an area that never happened. Before the pandemic crime had spiked for certain things, like misdemeanor assaults and robberies, I want to say 20+ percent. The politicians use Major Crimes, because it makes them look better as they go…

Or maybe there are more people at home with free time to make reports on neighborhood apps.

"free time"? And are you suggesting these are fake?

Re: Ask HN: How to prosper under negative interest rates?

#254

Post by OrangeMango »

mancerayder wrote: post #253
relaxing wrote: post #248

Earlier quoted context omitted.

Or maybe there are more people at home with free time to make reports on neighborhood apps.

"free time"? And are you suggesting these are fake?

There are many claims that these community apps end up with multiple reports of the same crime and reports of crimes that didn't actually happen. Not only that, but a lot of urban people have a terrible time distinguishing the sound of gunshots from other noises that are common in urban areas.

I don't want to claim that there isn't a spike in crime. There may well be. But you really have to be careful in relying on what you see reported on these apps. Especially with so many people at home, nervous and stressed out.

Re: Ask HN: How to prosper under negative interest rates?

#255

Post by mancerayder »

OrangeMango wrote: post #254
mancerayder wrote: post #253

Earlier quoted context omitted.

"free time"? And are you suggesting these are fake?

There are many claims that these community apps end up with multiple reports of the same crime and reports of crimes that didn't actually happen. Not only that, but a lot of urban people have a terrible time distinguishing the sound of gunshots from other noises that are common in urban areas. I don't want to claim that there isn't a spike in crime. There may well be. But you really have to be careful in relying on w…

It's also common sense! People without work, cops calling out sick, and street gangs ready to go. So I trust those reports, and I did just say above there are videos and exact addresses.

Also, Detroit's murder rate has just spiked by 50 pct and shootings by 30%, because you can't 'hide' that or hand wave that away.

Re: Ask HN: How to prosper under negative interest rates?

#256

Post by dot1x »

CTRL+F and nobody mentioned Austrian Economics, the Mises Institute, gold, bitcoin, sound/hard money... wow. People are really delusional and still completely under the thumb of Keynes' wrong economic "policies".

Wake up people. Coronavirus or not, the world has been in a state of decay since after WWI and it snowballed in the 70's when the last of the gold standard was severed.

People advising that 2/3 % inflation is "not only not bad, but a sign that the economy is doing great" have absolutely no idea what they are talking about.

For those who are a minimum curious, I really advise you to read two fenomenal books

- What has government done to our money? - Rothbard, Murray N.

- Democracy: The God that failed - Hans-Hermann Hoppe

To the OP: government's great plan is to eliminate cash or render cash useless. Everything will more to digital cash where they can effectively do negative interest rates. What can you do to protect yourself? Put most of your money in Bitcoin and Gold. These are the only hard money in existence.

Re: Ask HN: How to prosper under negative interest rates?

#257

Post by xchaotic »

pjc50 wrote: post #205
pgroves wrote: post #119

It's blowing my mind that I just did a ctrl-F for "compound interest" in this thread and got zero hits. It's not even part of the discussion any more.

Why? Perhaps we're just assuming we all know how it works. Or, at 2% to -0.5%, it really doesn't make a big difference.

If you have 200k and add 20k for 30 years plus compounded interest at 2% you’ll have 1,189,861.13 at the end.

Re: Ask HN: How to prosper under negative interest rates?

#258

Post by pjc50 »

xchaotic wrote: post #257
pjc50 wrote: post #205

Earlier quoted context omitted.

Why? Perhaps we're just assuming we all know how it works. Or, at 2% to -0.5%, it really doesn't make a big difference.

If you have 200k and add 20k for 30 years plus compounded interest at 2% you’ll have 1,189,861.13 at the end.

And (to return to the original post), how much do you have at compounding of 0% or -0.5%?

Re: Ask HN: How to prosper under negative interest rates?

#259

Post by fierarul »

shawnz wrote: post #252
fierarul wrote: post #250

Earlier quoted context omitted.

It is counterintuitive since the default explanation about DCA is that one will ride highs and lows for a good average return. I'll have to read that paper.

> that one will ride highs and lows for a good average return. That's what happens if you invest lump sum -- you get the average, which is usually good because of the upwards trend of the market (due to the market risk premium). When you DCA, you need to think about all the money that's NOT invested during that time, being lost to inflation. Essentially you are betting against the market with that fraction of your mo…

I find amazing that Vanguard also suggests this: https://investor.vanguard.com/investing/online-trading/inves...

> When you DCA, you need to think about all the money that's NOT invested during that time, being lost to inflation.

I see. So DCA makes sense only if you don't actually have that money available (eg. as a way of investing part of each future paycheck).

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