Rolling US Economy Into The Shitbin Thread

And to look at it as little as possible.

Chief KyiV neVer returned.

you're being sarcastic, yeah?

Wait, no, not at all, why?

it's a common thing to do, and not a _bad_ thing to do -- like, I can see it, from the individual's point of view, as if they had an employer pension and the pension fund was managed by a responsible third party. I don't think people should be obligated to do regular maintenance on their retirement savings (if that's the function of the savings -- other people have shorter term goals).

However, if you want to "maximize" your investments, the big zero-fee Vanguard fund isn't the way to go. ... And I am definitely not saying everyone should want to do this.

Also, one of the positive aspects of DIY investing is that you have more control over where your money goes -- I'm thinking of all the protests / activism around pension fund divestments for ethical reasons -- granted, there are targeted funds for "social impact" and "ethical investing" ... i guess i am probably just being too nit-picky.

Not having more control over where your money goes - ie minimizing the potential for an individual to fuck it up - is a large part of the point.

at least for me it is not my retirement money and not the only investment i do but i don't touch robinhood-type things, also easier on the ethics forms i have to do at work for individual stocks and sector funds

the crash is coming

― Nhex

on november 4, 2020

come on, we all fucking know this, right?

america doesn't have a functioning economy

Robinhood does not force people to trade, of course. But its success at getting them do so has been highlighted internally. In June, the actor Ashton Kutcher, who has invested in Robinhood, attended one of the company’s weekly staff meetings on Zoom and celebrated its success by comparing it to gambling websites, said three people who were on the call.

Mr. Kutcher said in a statement that his comment “was not intended to be a comparison of business models nor the experience Robinhood provides its customers” and that it referred “to the current growth metrics.” He added that he was “absolutely not insinuating that Robinhood was a gambling platform.”

my company has its own internal group of financial advisors and for a fee, we can give them control over our 401(k) investment strategy. I did that years ago and my returns went through the roof.

except this year obv but the losses have been managed.

Not having more control over where your money goes - ie minimizing the potential for an individual to fuck it up - is a large part of the point.

― Donald Trump Also Sucks, Of Course (milo z), Tuesday, August 18, 2020 1:18 PM (thirty-one seconds ago)

Oh, I agree -- and this is why I believe the "starve the beast = let's eliminate social security because individuals should be able to do what they want" philosophy is bad and will result in even worse poverty problems and income disparities than we have now.

Like, even if I were to subscribe to the position that the problem is financial literacy, and if as a country we did more to educate people on these things ... (if y'all are bored at some point, we can play the fun game where I defend this position while everyone attacks it) ... but even if I did wholly believe in the "financial literacy" thing, people will fuck up financially and make "bad" decisions or will just have Job-like series of tragedies happen to them (and most likely the victims of these tragedies will be poor black people or other POC) ... then what? As a society, we shouldn't say, "Whelp, sucks to be you, start a gofundme or starve" ...

However, I feel like there is potential for using investment funds in a social justice / activist / anti-corporate way ... and some of my aversion to the "just put all the money in a Vanguard fund and let them handle it" is that investing (and knowledge / skills related to it) could do a lot to challenge the status quo.

Every bit of advice I've read has just said put money in Vanguard Star Fund.

It also depends on whether it's a tax-sheltered investment ...

A question for y'all: for those of you who are vehemently anti-capitalist, progressive leftists, fuck Joe Biden and the Democratic Party -- do you feel awkward or any sense of conflict about having your money invested in some Vanguard-type managed fund?

Like, I have ethical issues and feelings like that in terms of my investments (mine are different but not virtuously aligned with my politics by any means)

absolutely

My KBR shares have gone up in value recently -- not 100% proud of that.

otoh I rationalize this investment in the profitability of fascist-adjacent industry by noting how many hours I have volunteered doing work for anarchist collectives and activists ... sorry for boring middle-aged ilx-ing

not really, i'm forced to either save or spend money. i don't have a lot of money, i'm not a hedge fund that can control what these corporations do. if i put it in a savings account the bank is going to decide where to put it and take all the gains.

I do feel conflict and researched socially responsible investing. I even put a good deal of money in an investing start-up who only invested in progressive/ethical companies. It lost money and they closed up shop. Vanguard offers it's own version, but it's returns are not as good. u

I'm an anti-capitalist who works at one of the the most successful capitalist enterprises of all time. So hypocrisy is not one of my top ten sins :P

There are other things you can invest in that aren't these big corporate-managed funds though -- someone I know had money in this fund that basically did loans to build and improve low-income housing, for example.

I even put a good deal of money in an investing start-up who only invested in progressive/ethical companies. It lost money and they closed up shop.

Interesting! what was it called?

DJI - do you get RSU's or ESPP stuff or ...? How much of your compensation is in shares of this enterprise?

Over 50% of my comp is in RSUs. Which just keep going up and up.

I was feeling kinda glum about all of it and ended up taking a lot of money out of the market earlier this year (luckily just pre-Covid) and bought a house. which i divided into sort of a duplex, and am about to turn the basement into a studio apt where I’ll live and... *sigh* guess be a godforsaken landlord.

no ethical anything under etc etc

damn yall are rich. jealous tbh

still technically have negative net worth, sort of like donald trump ;)

However, if you want to "maximize" your investments, the big zero-fee Vanguard fund isn't the way to go. ... And I am definitely not saying everyone should want to do this.

what does this mean? you should only buy the stocks that go up lots, not the other stocks? well yes, but this doesn't seem like actionable advice, and it also neglects risk.

i'm skeptical of the social value of ESG investing, basically this:
https://www.bloomberg.com/opinion/articles/2019-11-11/esg-stocks-are-graded-on-a-curve

not really rich. just old. my very conservative govt-hating parents were perpetually broke when I was growing up and it lead me to a path of aggressive saving & investing (no-load index/ autopilot) when I was like 19.

well i'm glad this thread took the turn it did, i should think about this stuff if i ever get out of cc debt.

on the whole "the crash is coming" tip i don't know jack about economics so take this with a bucketful of salt but i feel like we're going to be in those mode of people above a certain threshold floating upwards and people below a certain threshold being gutted for a long while and maybe there isn't a single "economy" anymore.

^i more or less agree with this tbh.

w the caveat that when it really comes down to it I don’t know jackshit about the economy either

However, if you want to "maximize" your investments, the big zero-fee Vanguard fund isn't the way to go

I know people say this (if by "maximize" you mean some version of "end up with the most money") but I have never seen any convincing evidence for it, and people have very motivated-cognition reasons for saying it. For a managed fund to be worth the fees, the manager has to be able to beat the market by a lot, and the evidence is sporadic at best that you can identify people who are going to beat it even by a little.

The issue of controlling your own investments to maintain influence is a different story and one I haven't thought about as much.

A question for y'all: for those of you who are vehemently anti-capitalist, progressive leftists, fuck Joe Biden and the Democratic Party -- do you feel awkward or any sense of conflict about having your money invested in some Vanguard-type managed fund?

― sarahell

for me, uh, personally benefiting from capitalism isn't really much different from benefiting from white supremacy (indeed, there does seem to be a significant statistical correlation there). i'm complicit in, and benefit from, a grossly unequal system. what i would like to see is for the system to become _less_ grossly unequal, and honestly? i'm perfectly willing to work within capitalism to do that. whenever i suggest such a thing, though, i find that a lot of _other_ people who are _also_ beneficiaries of, complicit in, the same grossly unequal system, are very quick to tell me "hey, buddy, you don't like it, the door's that way"

and those interactions _do_ give me a pretty strong sense of conflict and awkwardness.

what does this mean? you should only buy the stocks that go up lots, not the other stocks? well yes, but this doesn't seem like actionable advice, and it also neglects risk.

What do you think the people that manage the funds do? They basically try and predict what stocks (and other investments) will go up and which won't, and when, and buy low and sell high. Like, the general rationale for investing in one of those funds is "leaving it to the experts" ... that is a very good rationale, btw. But, it's kinda like, idk, buying furniture. You can get decent solid mass-produced furniture that might not be the best-made or perfectly designed to fit the spaces you want to put it, but it's okay and you don't really have to put much effort into obtaining it, and it's fairly inexpensive. Your ideal furniture would cost more, in either money or time and labor. So, there are more "actively and/or aggressively" managed funds that will likely give you higher returns, but they will have higher fees. Some people are fine with that, if they "know" their investments will be more profitable even with the fees. (The dude that uncovered/predicted the sub-prime crisis was a private fund manager like this.) ... Of course, the other part of the analogy is, if you have shitty carpentry skills and know jackshit about building furniture, you probably shouldn't be day-trading on Robin Hood and buy a West Elm living room set, er, put your savings in the Vanguard STAR fund.

The logic of the standard Vanguard advice, AFAICT, is that those 'actively and aggressively' managed funds don't actually have any actual benefit (to the person with a 401k) over the long term.

i don't know what the star fund is but the "zero fee" vanguard fund mentioned when this started such as total stock market index fund (not zero but close) doesn't fit any of what you're talking about and is good for people who don't want to spend time researching stocks

there is research justifying it but the common anecdote is warren buffett making some bet about the s&p 500 vs some other thing

For a managed fund to be worth the fees, the manager has to be able to beat the market by a lot, and the evidence is sporadic at best that you can identify people who are going to beat it even by a little.

I think there are also aspects relating to scale at play. Plus, the big thing of "you are being paid to manage other people's money."

Personally, I have a mix of stuff -- some low/no-fee managed funds, some moderately-priced managed funds, some fairly conservative investments in Farm Bonds and CDs, and a bunch of individual stocks that either I or my mother picked. I am (for now) beating the market, I think ... not that I wanna be all, "Hey, let me manage other people's money, I'm an investing genius" ... mostly it's stocks that Schwab has given good ratings that are in industries that are doing well, companies whose businesses I understand, as well as a handful of things I purchased pre-Covid that I think will eventually bounce back in the longer term. ...

is good for people who don't want to spend time researching stocks

totally!!! I respect this!

those 'actively and aggressively' managed funds don't actually have any actual benefit (to the person with a 401k) over the long term.

not everyone is that person though ... some people have investment savings that aren't tax sheltered (as in the 401k isn't taxable until the funds are distributed to the person), as well as some people are looking for more short-term gains ... like wanting to be able to buy a house or something in a few years or so.

if i wanted to buy a house in a few years i would not save it in stocks. anyway i'm going to the gym to invest in my bod now

i’m a 3-fund guy (Total market index, total intl index, total bond index—weighted heavily toward the TMI) and many Bogleheads swear by it, but I just always did bc im dumb and lazy

harbl is your gym open?? mine is not :(

Empirically doesn’t the average *hedge fund* does worse than the s&p500. These people have plenty of time to spend on this. People suck at it. In the long run *all* people suck at it.

And averaged across all investors (institutions, hedge funds, etc.) the average investor does slightly worse than than the total stock market *by definition* (this isn’t an empirical claim, it’s a statement about how averages work in the presence of trading costs).

TBF, isn't it that the average hedge fund *investor* does worse, after all the fees? I might have my stats wrong about that. Also since pretty much anyone with access to rich people's money can call their scammy bullshit a "hedge fund," the average is likely weighed down by garbage a bit. Still do not advocate trying to beat the market, just saying.

The socially responsible investing service was called SWELL.

Oh yeah if you’re a hedge fund that takes fees from outside you personally should be doing better than the market unless you’re an idiot.

The most successful hedge fund doesn’t take outside investment though IIUC (Renaissance).

actually I just meant that I think there are hedge funds that, in pure returns, beat the market on a consistent basis (although again I could be wrong). I figure they do it through legal grey-area strategies, inside information etc.