[johnchristopher]

I'd like to know what to do with ~10 000 euros, right now. Where should I put it so it doesn't lose its value and keep a bit with inflation ?

edit for a bit of context: Western Europe, renting, unlikely to be able to buy/invest into a house/flat, looking at gold ingots, not the nerve for crypto.

[neilfrndes]

I recommend reading 'The Intelligent Investor'. The book describes strategies that help you navigate all kinds of markets. https://en.m.wikipedia.org/wiki/The_Intelligent_Investor.

As counterintuitive as it seems, the book actually recommends buying stocks in a bear market since they are priced reasonably. Warren Buffet's famous quote comes to mind: “Be fearful when others are greedy, and greedy when others are fearful.” The book also talks about the importance of long-term investing and discipline.

[pishpash]

I don't know, people seem pretty greedy still. VIX barely at 30, PE10 near pre-pandemic highs, real yields negative out to 3-4 years, and markets are orderly. If you get weeks and weeks of 4% daily drops, real yields at 5%, and hedge funds being force liquidated like 2008, then you know real fear.

Look at how far behind the Fed has gotten: https://www.longtermtrends.net/real-interest-rate/

[ericmay]

(This is not financial advice)

Ignore the "be greedy"* part of the person you are replying to (although your hesitation is kind of proving their point a bit) but follow the advice of the Intelligent Investor.

When markets go up, everyone is happy to continue to invest. When they go down? People stop investing. That's precisely what you shouldn't be doing. Staying the course and continuing to invest regularly is key. When markets are sour that's when people get nervous and alter their behavior.

* Want to be greedy? Start buying Coinbase stock and Bitcoin. Notice how everyone is scared right now?

[nly]

The stock market has 100 years of data behind it, as well as a munch of somewhat sound economic theory w.r.t capital allocation and earnings.

Bitcoin does not. There's no reason at all why Bitcoin can't go to zero in the next 10 years. The stock market (as a whole), not so much

[shshshd]

This is great advice that bets that the system is a going concern. If the system collapses, then the bet goes sour.

Of course, if the system collapses green pieces of paper will be just as valuable as any stock certificate.

[astrange]

The "system" is doing fine - in fact the US economy is doing great. The stock market is not the economy.

[pishpash]

Yeah, it's the best time to invest since ... (checks watch) ... 18 months ago. I'm sorry, at an investment horizon of 10-20 years, that's not a slick deal. I am also talking about bitcoin. If it goes to $5000 then we're talking.

I'm not sure who were investing past mid-2021, to me there was nothing at all publicly investible for the long-term at that point. You were guaranteed an inflation-adjust loss just looking at how deeply negative real rates were.

[Spooky23]

Typically the shit hits the fan in the fall. You’ll have a crash/correction than a deeper one. That’s when you buy.

Personally, I went mostly cash and TIPS last year. You should too.

[kobalsky]

to be fair there's a good chance we are nowhere near the bottom.

if SPY dips below 250 then you'll start seeing the fear of god in some faces.

[roflyear]

Homie when is the last time weeks and weeks of 4% drops happened?

[motohagiography]

It's a question of what you think is going to happen. Personally, I think there are a lot of other people who are looking for ways to get out of cash and into something that is portable and loses value at a slower rate than inflation as well.

It implies increasing demand for alternative assets like art and collectables, and maybe small land purchases. If there's something you know about or enjoy, it may be worth just getting into buying something, like antique motorcycles, painting and sculpture, photography, classical instruments of the non-piano variety, fancy watches, wine auctions, and other niche high end collectables. Even the top level hi-fi systems from niche makers (McIntosh, Luxman, Audio Research) with limited supply look like they could still be in demand in a decade, just like a good 1970s amp or speakers still costs more than an iPod.

If these sound extravagent, the alternative at that level of investment is to buy a small crypto mining rig. Personally I would rather just take the hi-fi system or the instruments. :)

[justapassenger]

No one can predict the future. But generally time in market is more important that timing the market. Works only if you invest long term.

[tmountain]

This is not financial advice, but stocks are getting cheaper every day. Invest into profitable companies that can weather the storm.

[UkrainianJew]

There's one caveat. Say a profitable company pays $1M dividends. With the industry-average 3% yield, this puts market cap at 32M. Currently you can get 3% risk-free with government bonds, and this number will go further up as the interest rate rises. Say, it goes to 6%. Now, in order to be competitive with bonds, the profitable company will need to find a way to pay 2M in dividends, or its cap will drop to 16M (i.e. the shares you bought will lose half the value).

[roflyear]

Plenty of stocks have value and pay zero dividends.

[nopzor]

and that’s why such stocks have fallen so much, as interest rates have risen. the two of you are actually agreeing with each other. the principle is similar.

[sakopov]

Equities have been decimated. The housing market is starting to look like it's next. There is nowhere to hide right now.

[andsoitis]

"You only find out who is swimming naked when the tide goes out."

[swagasaurus-rex]

Thank god?

[xdennis]

For which part?

[_carbyau_]

For a lot of people, both!

There are lots of people with zero shares and a simple dream to own their home. This is looking hopeful for many.

[dnissley]

This is zero sum thinking -- however many people this helps, it will take just that many getting hurt in order for it to happen. Doesn't solve the root of the problem in the least, it's just a wealth transfer.

[_carbyau_]

Yup. But how many of the people who might be able to afford a home if it comes down 20% will care about the others.

This is what a market does. Risks are taken and the result is that some will lose out. People are not guaranteed profits. Until you are a corporation with enough influence in government it seems...

[yellowapple]

> however many people this helps, it will take just that many getting hurt in order for it to happen

This presumes that the number of people this helps is equal to the number of people this hurts. That's unlikely, given how wealth concentration tends to work in capitalist economies (that of the US included).

But yes, we need to address the root of the problem - the root of the problem (as applied to housing) being the fact that land is treated as ownable property in the first place. That's fine and dandy, but that produces rather nasty externalities that are long overdue to be internalized - specifically, via land value taxation.

[r00fus]

Just a nitpick but

s/decimated/devastated/

Decimated means 10% death rate (usually as an brutal lesson). Did stocks lose 10% or did 10% of stocks just get liquidated?

[justin_oaks]

Just a nitpick but you're making an etymological fallacy.

https://en.m.wikipedia.org/wiki/Etymological_fallacy

The word "decimate" is explicitly mentioned in the article above.

[FinanceAnon]

I would just hold it - I have sold most of my index fund holdings in the past 6-9 months and been just holding cash. I don't think stocks have reached the bottom yet, so holding cash at 0% return is still better than negative returns from stocks. Right now, it's about not taking losses. I also don't see the market and economy rebounding quickly after reaching bottom - they will stay flat for a while IMHO

[atombender]

As a counterpoint, I would quote the great John C Bogle: "Never, never get out of the market." [1] Knowing when the market has reached the bottom is not really possible.

During the dot com crash in 2000-2001, investors sold all the way down to the bottom (and lots of them sold at the very bottom), and then they eventually sold all the way up to the peak, when instead they could have just held onto their shares.

Rebalancing doesn't really work. That's another thing Bogle showed us.

Of course, if you need the cash, that's another matter. But then you arguably shouldn't have invested it in the stock market to begin with. If you have a time horizon less than 5 years, the market is just too volatile.

[1] https://youtu.be/1SLb1QJvTvg

[notch656a]

>"Never, never get out of the market."

Cash is a market though, just a different market. If you hold cash you're in a particular market, one that has earned significant returns measured against equities this year. (of course, depending on timespan you may want to pick _which_ market you think best)

It's been strange indeed. My highest yielding investment the past couple years was buying a new vehicle. Conventional wisdom says new vehicles are horrible investment, but in this market it's exceeded yields of every single asset in my pretty diverse basket.

[atombender]

In the context of Bogle's statement (and the parent's comment), it was the stock market, specifically index funds.

It goes back to the realization that no investor can predict the peaks or troughs of the market, so getting out of the market is effectively trying to time it. One may be lucky and get out at the peak and then buy back in at the bottom, but on average you will lose money this way.

[sumedh]

> If you hold cash you're in a particular market, one that has earned significant returns measured against equities this year.

What about the last 100 years?

[notch656a]

Depends. Pennies from 1920? Beat inflation. $20 coin from 1924 ($20 was worth an ounce of gold, so it was just an ounce gold goin)? Beat inflation.

Dollar bill from 1922? Lose, but mostly because the fed reneged on their obligation of gold backing.

I believe If you held 100 years from 1805 to 1905 there wasn't much inflation at all.

So it really depends.

[TameAntelope]

Not during the last 100 years, for the last 100 years.

The whole point is you have no clue when the bear market will end, and a lot of the recovery happens in the first few days (or sometimes even just the one day) of the new bull market.

Trying to pull in or out means you miss out on the best gain days.

[kqr]

So the refinement of the statement might be "never, never move your allocation to 100 % of a single asset."

(But since you speak of a diverse basket, you probably know this already.)

[kqr]

> Rebalancing doesn't really work. That's another thing Bogle showed us.

Wait, what? Rebalancing has worked very well in my backtesting, assuming the fairly generous trading fees I get, at least.

What are you referring to?

[atombender]

Bogle did extensive analysis on the impact of rebalancing (between stocks and bonds) on historical portfolio returns, and decided that it does not meaningfully increase your returns.

His main argument was rebalancing effectively switches high-returning assets for lower-returning ones. If one part of your portfolio did better than another part, why would you get rid of it just to bring the asset allocation back to your target?

Rebalancing will also generally generate capital gains in taxable accounts. If you're aiming for 60/40, but your stocks are now up and it's 70/30, selling those stocks to bring it back to 60/40 again means you will pay capital gains on whatever you sell.

The data shows you can get better returns by rebalancing weekly, but this is really too much for most investors, unless you use something like M1 where rebalancing is a single button click.

Of course, there's more complexity to this question. The above mostly applies to the accumulation phase. To someone in, or close to, retirement, for example, having a portfolio that's drifted too far into stocks can be a risk.

[staticman2]

"His main argument was rebalancing effectively switches high-returning assets for lower-returning ones. If one part of your portfolio did better than another part, why would you get rid of it just to bring the asset allocation back to your target?"

Because of reversion to the mean. Rebalancing should insulate you from weird outcomes like 90% of your money being in GameStop stock then crashing to nothing a week later.

Pretty much every professional fund of fund rebalances, including those by the company Bogle founded. This is weird advice.

[kqr]

Another way to phrase the reply you have already had: because these assets are martingale.

In other words, to the extent good historic performance says anything about future performance, that effect is already priced in. This means you shouldn't hold on to a historically good investment just for that reason -- it's just as likely to be a loser going forward.

If you determined that the amount of risk you're willing to put into equity is 60 %, the only thing that happens if you let it drift up to 70 % is that you increase your exposure to equity higher than you originally intended.

Maybe you have good reason to do that, but historic good performance is not that reason.

[atombender]

> they eventually sold all the way up to the peak

Edit: Bought all the way up.

[andsoitis]

> so holding cash at 0% return is still better than negative returns from stocks

holding stocks as they go down in price does not necessarily matter. It only matters at time of sale. Selling an index (or a particular stock or set of stocks) as they go down only to buy them again later is not the right strategy... you're incurring transaction costs at the very least and the fact that you cannot time the market means you'll probably lose out even further.

Hold the index, unless you need the cash flow or forecast that you need more buffer for flexibility and don't want, in the short term, to be penalized for volatile stock prices (e.g. in case you need to sell to service some cash needs).

And if you have the cash, continue to buy the index on the way down. If your view is that the market, over the long term, is the best generator of wealth, then continuing to buy into it is the more rational strategy.

Inaction is sometimes the best action. There are more ways to be dead than being alive.

[Retric]

If you can sell 100 shares today and use that money to buy buy 200 shares in 6 months then you are better off than if you had held 100 shares for that same six months as long as you buy back into the market.

Actually trying to time the market is largely a fools game, but people do get lucky. Or more often realize they shouldn’t try and time the market.

[roflyear]

Yah and if I could buy bananas today for $1 and sell them tomorrow for $5 I'd be fairly wealthy. And if my uncle was a monkey and my aunt a banana farmer we'd all be well off.

[seoaeu]

Yeah, except in six months you’d be thinking of waiting until you could buy 300 shares, and might miss the buying window entirely

[andsoitis]

Right. Hindsight is 2020 but that does not an investment strategy make.

[ushakov]

> holding cash at 0%

as consumer prices are surging this no longer may be true

my bet is on physical assets: guitars, gold, watches

[subsubzero]

Gold looks ok, I don't know about guitars but watches are plummeting just like the stockmarket.

[kingnothing]

Which watches are plummeting? I've had my eye on a couple of specifics for a while and they're still as expensive as ever.

[iancmceachern]

Luxury collectable items typically suffer in a recession

[wollsmoth]

I'm not sure if you can buy ibonds but those seem good for up to 10k usd.

Otherwise, Either a targetdate fund, I use VFIFX which should give most benefits of a bull market while giving some cushion due to its diversification.

Or, just a nice total market index fund should be a good option. It may drop a bit but it's as diversified as it gets. I use FZROX, but there are many others.

[solumunus]

Energy/renewables. They are highly resistant to inflation. In my opinion they're the best bet over the next 5-10 years with current macro conditions and the huge ongoing investment into renewable infrastructure.

Some good FTSE options paying nice dividends:

https://uk.finance.yahoo.com/quote/EGL.L https://uk.finance.yahoo.com/quote/TRIG.L https://uk.finance.yahoo.com/quote/UKW.L

Uranium spot price should also be stable/grow depending on many factors:

https://uk.finance.yahoo.com/quote/YCA.L

Disclaimer: far from an expert.

[vishnugupta]

You haven't said what your time horizon is and risk appetite. i.e., For how long do you not need this money and what % of capital are you OK to risk without which it's almost impossible to advise you.

That said; during times of uncertainty cash is king so my advise is to keep it in a time deposit for 6-8 months and wait for the markets to stabilise.

Based on yesterday's fed FOMC guideline they believe there's still a long way to go before they tame the inflation and they are likely to raise interest rates as high as 4%. I don't know if markets have priced 4% in yet or not. All this is to say next 8-10 months are going to be extremely choppy/volatile.

Once you see signs of stability and recovery you can enter equity markets through DCA.

[senko]

Go through the videos in Plain Bagel and Common Sense Investing (Ben Felix) YouTube channels, then read, read the sidebar in r/eupersonalfinance subreddit, and that will give you solid foundational knowledge and context for figuring out what's best for you.

[JonChesterfield]

Buy something you want for 20000 and watch the debt inflate away?

[nly]

So the theory here is if you know you're going to buy a $20K item in 2 years time, and you know it's going to go up in price in that time, you're probably better off borrowing the money and buying it now.

The problem of course is we often don't know either of these things, and having better cashflow, or a pile of savings, now might help you weather the coming storm.

[adamsmith143]

This always seems silly to me. You are making an assumption that your Income will inflate by the same amount. But I don't know anyone getting 8% raises each year in any industry.

[PheonixPharts]

It still make sense as long as the thing you're buying is something you'll eventually need to buy anyway.

Say there is a 20k car you need to get to work that you should purchase within a year. Then assume, in a simplified scenario, you can either take out a 6% annual loan, or just save up the money for a year and then buy the car.

Now say the car raised in cost with inflation at 10%. In one year the wait and save will mean the car new costs $22k where as if you had just taken out the loan it would have been $21.2k.

Typically the loan isn't the best thing you can do because a.) inflation isn't that high and b.) there are other ways to generate revenue with your money if you have it one hand.

I still see plenty of those wacky startups offering 0% interest for a year. I made a $10k, necessary, purchase for my home last year using one of those and going to save quite a bit by doing that.

There's also the darker truth that if shit really hits the fan, you can always default on debt, often without real risks of your stuff being repo'd. There's no equivalent if you wait to purchase something in the future.

[TimTheTinker]

A car might be a bad example... prices have really taken off since early last year, unfortunately.

[throwaway12245]

https://tradingeconomics.com/united-states/wage-growth Wages in the United States increased 11.67 percent in April of 2022 over the same month in the previous year. source: U.S. Bureau of Economic Analysis

[jokethrowaway]

You just need to job hop

[bombcar]

If you're not in the US (and Euros sounds European somehow) you don't have access to I bonds - which would be the safest bet. Perhaps there is something similar?

[johnchristopher]

There's something similar but it's in the .9-1.5 interest rate before 30% off of the interests when it's due. In Europe I think you can't buy bonds from another EU country but you can buy eurobonds (which seems to be different but are still emitted by EU countries).

[notch656a]

It's probably not worth the trouble, but I think anyone can start a US LLC and use the tax identification of that business to buy I-bonds.

[jonas21]

No, only individuals can buy I-bonds.

EDIT: that's not right. please see below.

[quesera]

This is not correct.

Individuals can buy $10K/yr. Married couples can each buy $10K/yr, and you can buy the same amount for children.

Also, businesses can buy $10K/yr, trusts can buy $10K/yr, and you can purchase $5K/yr with a tax refund.

It would be not unusual to be able to buy $45K/yr (4-person household), and if one of the family is self-employed, $55K/yr.

....

That said, don't buy lots of I bonds without first considering the advantages of TIPS!

[jonas21]

Ah, you're right. I had misread this chart earlier. Sorry about that.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

[ISL]

It may be helpful to think through your intended holding period.

As a companion to the sibling comment recommending the Intelligent Investor (realize that index funds didn't exist when Graham wrote that), I'd keep in mind the mantra, "price is what you pay, value is what you get".

If the holding-period is decades, there are good arguments in favor of stocks/index funds. Shorter-term than that, it may be difficult to provide guidance with any real certainty.

[nly]

Probably best to just hold on to it. Annual inflation of 10% sounds awful, but over short periods it's not that bad.

[User23]

Is there some kind of inflation protected EUR denominated bond or note you can buy? If the maturity date is reasonable that might not be a bad place to park excess cash.

[jokethrowaway]

Mortgage to buy properties overseas you can afford. Fractional ownership of real estate.

Alternatively keep cash.

[quickthrower2]

Keep it as a cash reserve IMO. Save more.

[xiphias2]

Half year ago it would have been hard tocsay anything, but right now even the stock market has realistic price. (Btw I'm in BTC)

[shshshd]

10k is not that much money. I know it takes a lot of effort to save, but its small change. If you have somewhere to store it, buy consumable goods.

- Several hundred dollars each of tuna, prosciutto, a wheel of Parmesan, jerky, rice, flour.

- If you have an oil/wood heater fill up the tank. If gas buy plenty of wool sweaters.

- If you have to drive to work, get a scooter.

- If you live in Czechia, or Finland, (you're not Swiss I gather) a rifle, shotgun and/or pistol. Otherwise upgrade your locks

- Any left over money (if any) buy an assortment of gold, silver and what not.

This might all seem doom gloom, and it is. But inflation is the least of our concerns. We're headed straight to an early 90s Soviet style collapse of our economies.

[pavlov]

I can’t really agree with your prognosis, but honestly this advice is amazing because outside of the apocalyptic context it’s so fun. Got $10k? Buy a scooter, prosciutto and a wheel of Parmesan!

Why shouldn’t I spend like an Italian small-town bachelor in 1975, if the world is ending anyway.

[bergenty]

But why? Who wants to eat all that processed food when you can just have fresh food instead.

[Firmwarrior]

Probably not a bad idea to have a few weeks' worth of non-perishable food around just in case there's a big power outage/earthquake/whatever

If this whole societal house of cards comes tumbling down, though, I think most of the people posting on HackerNews are going to be screwed (relevant: https://ext.penny-arcade.com/comic/2019/03/15/deer-diary )

[8note]

If I want a lot of tuna, I'm going dumpster diving at a sysco.

Same with flour, really

[roflyear]

Why do you think the world is ending?