Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: I have $450K cash, what should I do to maximize my return?

news.ycombinator.com

Post reply on HN
Print view View original

181–190 of 509 posts

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#181

Post by marvin »

Globally diversified low-cost index funds. Meaning not just US, S&P500 etc, but also Europe, developing markets, Nordics, «small cap» (ish) companies.

That’s the portfolio I’m using, anyway. No currency hedging and slightly underweight (but not majorly so) wrt. the US.

Some US-based index fund strategies include only the US, but that leaves you less diversified. Though with better returns, historically.

Not sure why you’re leaving index funds so underweight in your strategy; curious what options you’re considering. There aren’t a lot unless your strategy is more along the lines of wealth preservation.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#182

Post by throw0101a »

mancerayder wrote: post #139
throw0101a wrote: post #127

Earlier quoted context omitted.

> It's not a zero sum game necessarily. It is, actually. William F. Sharpe laid it out in the 1991 paper "The Arithmetic of Active Management": * https://web.stanford.edu/~wfsharpe/art/active/active.htm * https://www.jstor.org/stable/4479386?seq=1 Sharpe won the 1990 Economics Nobel for other work: * https://en.wikipedia.org/wiki/William_F._Sharpe The more active a trader is, over a longer time frame, the more likely…

I'm happy to go through these in some depth, but the most obvious first response to this is, 1991... Is the landscape of 1991 the same as the landscape of 2020, with its 10% of the s&p in just a few companies, with Robin Hood kids, with money printing, with Seeking Alpha and information overload? Talk shows about stocks and news algorithms pumping stocks to the masses? Some of your links are for active fund managers…

> Is the landscape of 1991 the same as the landscape of 2020, with its 10% of the s&p in just a few companies

Yes, it is the same:

* https://awealthofcommonsense.com/2020/07/the-nifty-fifty-and...

* https://theirrelevantinvestor.com/2018/11/26/the-nifty-fifty...

* https://en.wikipedia.org/wiki/Nifty_Fifty

* https://etfdb.com/history-of-the-s-and-p-500/

* https://www.qad.com/blog/2019/10/sp-500-companies-over-time

That's the definition of the S&P 500: the largest five hundred companies publicly traded companies.

> with money printing,

I do not think this actually does what you thinks it does:

* https://www.youtube.com/watch?v=K3lP3BhvnSo

* https://rationalreminder.ca/podcast/109

> […] Talk shows about stocks and news algorithms pumping stocks to the masses?

Please see the 1990s and "irrational exuberance". I live in Canada: ask anyone here above a certain age (40s) about Nortel and Bre-X.

> Are fund managers (who have clients) compared to the likes of you and me ?

Fund managers have more resources than you and me, and thus probably have better information to base decisions on. Unless, of course, you are using satellite imagery in your investing workflow:

> Currie’s prediction proved correct. As word spread that satellite images were a reliable predictor of corporate profits, a range of investment funds began buying retail-traffic data from RS Metrics. In the following years, the company expanded, tracking not just parked cars but solar-panel installations, lumber inventory at sawmills, and the mining of metals worldwide.

* https://www.theatlantic.com/magazine/archive/2019/05/stock-v...

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#183

Post by jacquesm »

I'd advise you to stay liquid for a sizeable fraction of that for the next 12-18 months. The world is changing rapidly and access to a sizeable chunk of cash could make all the difference once the smoke clears and it is clear what to do. Also: you could go bargain hunting.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#185

Post by beagle3 »

nknealk wrote: post #123

Surprised not to see this mentioned anywhere. In finance, we don’t look at maximizing total return but rather risk adjusted return. Buying a lotto ticket has amazing total return if you hit the jackpot but really bad risk adjusted return. The thing you should spend some time doing is deciding what your risk tolerance is and how much variance in your portfolio you can stomach. Then you can start talking investment str…

A lotto ticket does not have a good return; most times it has negative expectation; after a few weeks with no winner, it is sometimes positive.

Risk adjusted, almost independent of your risk metric, it is always horrible.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#186

Post by hydroreadsstuff »

ummonk wrote: post #165
hydroreadsstuff wrote: post #144

Earlier quoted context omitted.

The historic worst case for the inflation-adjusted S&P 500 is not being up from 1929 - 1987 - 58 years. https://www.macrotrends.net/2324/sp-500-historical-chart-dat... Edit: This ignores dividend reinvestment as ummonk noted. https://www.officialdata.org/us/stocks/s-p-500/1900 suggests 1929 - 1944 was probably the longest time. We are in unprecedented times. Highest debt, lowest bond yields, crazy P/Es, historic GDP…

I think that worst case looks worse than it was because it is ignoring dividends.

Good point. I found this here: https://www.officialdata.org/us/stocks/s-p-500/1900 1929 - 1944 seems to be the worst.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#188

Post by jacquesm »

glofish wrote: post #62
Trias11 wrote: post #55

Earlier quoted context omitted.

Share your ideas then. Panamá gets stable revenue from Panama Canal plus some natural resources and operates in US dollars in eastern timezone. As a plan B it’s not exactly that bad.

Your advice only works if one speaks fluent Spanish and is well versed in and comfortable with the way societies work in Latin America. For anyone else it is a recipe for disaster (as in being taken advantage of many times over)

Plenty of Americans (and Canadians) in Panama that barely speak Spanish and they're doing just fine. I'd get out of Panama City though, there are a lot of nice seaside towns, much nicer than Panama City.
Post reply on HN