Ask HN: What kind of personal financial investment do you do?

My investment philosophy comes more or less from this interview: http://www.kirkreport.info/2009/03/qa-with-less-antman.html

I only own 3 ETF's - 50% VT, 20% RWO and 30% PCRDX. I'm investing for the super long run and think of stock downturns as a great time to buy more shares.

It's actually quite amazing to me that a lot of geeks who would spend literally hundreds of hours researching esoteric technical knowledge on the Internet, won't spend at least a few hours researching how to setup their retirement accounts. With life expectancies on the increase, we can reasonably expect to live 1/3rd or more of our life in retirement. Wouldn't you want to make sure you had enough money to do this?

Also, for someone with an entrepreneurial streak, wouldn't it be nice to "retire early" in your 50s and have the luxury of a steady income while starting a new business? This is ideal - imagine being a founder and not having to worry about paying for food or housing.

In the current economic climate, it is pretty much a waste "investing" in anything until you have, say, an 8-figure sum in cash laying around doing nothing. I don't have that, so I am not bothering with "investing". I put "investing" in quotes because I feel the word tends to be perversely used; people really mean speculation, that is, gambling with negligible effects in terms of real-world wealth creation, but the gambling happens on such a huge scale that it distorts market prices hugely. Real investing is when you put money directly into something in order to enable the creation of something that wouldn't have been possible without your capital (as the YC folks do).

Stocks are terrible. If you look at market histories, corrected for inflation (actual inflation, not government-reported inflation, which is always understated, as the government benefits by understating it -- so normalize against something like an alternative inflation index or else straight-up commodities) then the S&P, DJIA, etc have actually not grown in 15 years. 15 years!! I know all of the "just buy an index fund" seems like good advice -- and it did used to be -- but in modern conditions that is no longer true. On top of this fact, pile on the risk of another market crash due to the USA's still-precarious economic situation, and stocks are clearly just not worth being in. (People are starting to realize this; there have been net outflows from equities most of the time for the past 40 weeks, and insider-selling-to-buying ratios are consistently huge.)

You can put money in bonds, but then it is locked up and you have a lot of inflation risk, so then you'd be aiming at short-term bonds, which are going to yield less.

Really what has happened is that US economic policy has become very hostile toward people who are responsible and save money, as an incidental effect of the desire to stimulate consumption (which mainly means taking on more debt and keeping rates tremendously low because if they ever become not-low now, debt burden is going to crush the economy.)

The upshot is that you are better off taking the mental energy you would have expended on "investing" and subsequently worrying about your money, and instead funneling it into your creative endeavors. You will make more money that way, especially when you take a long-term view. (Think about Einstein and the story about him having a closet of identical suits; except what I am talking about here is way less extreme and way more obvious.)

I have a rant about how peoples' "investing" according to the modern American model is actively making the world a much worse place than it ought to be, but this post is already long enough.

That's not really the point, I think the point is that I shouldn't have been investing in something that could evaporate on paper in 3 months.

Either way, yes, the point is I'm a terrible equities/retirement investor and a better small business person. Everyone here has excellent reading comprehension, as I would expect on HN.

> That's not to say that your startup isn't a better investment, though.

I didn't sell at the first sign of danger (first of all - selling at the first sign of danger would have been a GOOD idea, but my father, the successful older investor, told me to hold on as it crashed.). I sold after the market had come back by around 60-70% from the lows. That was good enough for me, especially since another 'double dip' was a very real possibility in the beginning of 2010.

If I had sold at the bottom I would have lost nearly everything. But I finally liquidated after my startup was consistently making money and I actually wanted the cash to put back into the business / spend.

Keep in mind I was never broke - I just had a large proportion disappear for a while. That drove me to do 'smarter' things with it after some of it came back.

Having said all that, "You should have held on to it" is standard 20/20 hindsight that makes a market crash sound so predictable. I think I had pretty good forward-sight given the situation.