Author Topic: Refreshingly honest investment article  (Read 2471 times)

RedmondStash

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Refreshingly honest investment article
« on: December 21, 2017, 11:11:55 AM »
Rarely do I read a financial article that doesn't make me cringe, but this one is practically Mustachian:

https://www.marketwatch.com/story/if-you-want-to-get-rich-invest-in-treasury-bills-not-faang-stocks-or-bitcoin-2017-12-20?siteid=yhoof2&yptr=yahoo

talltexan

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Re: Refreshingly honest investment article
« Reply #1 on: December 21, 2017, 11:46:32 AM »
You mean it's mustachian aside from the blatant market timing?

RedmondStash

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Re: Refreshingly honest investment article
« Reply #2 on: December 21, 2017, 12:17:55 PM »
I mean it's Mustachian in that it's about starting investment young, avoiding fads, buying and holding, and getting rich slowly. It quashes the idea that you can somehow make up for decades of not saving with desperate Hail-Mary investments in your 50s.

talltexan

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Re: Refreshingly honest investment article
« Reply #3 on: December 21, 2017, 01:45:23 PM »
Yet Mr. Dillan chooses to use bluster about expecting a bear market as a substitute for the science that says time in the market is superior to market timing.

scottish

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Re: Refreshingly honest investment article
« Reply #4 on: December 23, 2017, 09:12:28 AM »
Yet Mr. Dillan chooses to use bluster about expecting a bear market as a substitute for the science that says time in the market is superior to market timing.

He doesn't say it explicitly, but he's talking about reversion to the mean, is he not?    Mean reverting behaviour is pretty well accepted.   (Or am I out of date again?)

PizzaSteve

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Re: Refreshingly honest investment article
« Reply #5 on: December 24, 2017, 03:49:53 PM »
Yet Mr. Dillan chooses to use bluster about expecting a bear market as a substitute for the science that says time in the market is superior to market timing.

He doesn't say it explicitly, but he's talking about reversion to the mean, is he not?    Mean reverting behaviour is pretty well accepted.   (Or am I out of date again?)
Except that one must ask onself, what is the mean?  how are we sure that returns will continue to cluster around it, when other markets like Japan havent.  Also, when will we revert, because this year hasnt been average, last year wasnt average...  Also, since as no clear patterns have ever existed in market data (other than general tracking of earnings growth), how will we know we can predict future earnings will be average?

Reversion to the mean is far from the accepted future.  It is a probability among many possible outcomes.

Mighty-Dollar

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Re: Refreshingly honest investment article
« Reply #6 on: December 24, 2017, 06:10:37 PM »
Horrible article advocating market timing. How do they know that the DOW won't go up to 30,000 or 40,000 or more before the next significant downturn? Bull markets don't die because of old age; They die because of something like the Fed tightening too fast. 
Even starting at a terrible starting point (Jan 2000), 40% stocks / 60% bonds was the best stock/bond allocation. It didn't make that much difference if you were even 100% stocks. Even for a retired or near retirement person who is drawing from their savings, it makes sense to be about 50% stocks.
https://www.youtube.com/watch?v=opNohVglLX0
https://www.youtube.com/watch?v=ZOXu2cu7ZUw
« Last Edit: December 24, 2017, 06:12:26 PM by Mighty-Dollar »

scottish

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Re: Refreshingly honest investment article
« Reply #7 on: December 25, 2017, 12:09:08 PM »
Really?   You guys ever hear of a low pass filter?    Lots of stuff you can borrow from engineering for processing time series.

Being a bit less snarky, if you don't believe prior data to be predictive of future data *at all*, then how do you pick your asset allocation?