[abustamam]

Stocks and money should be boring for most people. I'm not a financial adviser and this isn't financial advice but I believe no one with a net worth less than $2m should ever buy an individual stock. Invest in a target date retirement fund for your 401k. Same for Roth Ira. If you have more money to invest after that, invest in an index that aligns with you values (for example I invest in an ESG index for environmental, social, and governance, ie no weapons or drugs). I've kept my money boring for over ten years and my boring investments have over tripled in value. I consider it a point of pride that I don't know what the DOW is at or how much NVIDIA is trading at right now.

It always boggles my mind when someone who is middle to maybe upper middle class tries to time the market or buys/sells stocks in reaction to random news like this. At best you're going to be up maybe 50% on this trade, and you're going to pay commission to your broker, and may even need to pay taxes. At worst you're going to be down a lot and still pay the broker.

[carlosjobim]

On the contrary: People with a low net worth have very few opportunities to scratch and claw their way out of their holes in this global feudal system. They are the ones who need to be able to make high-risk, high-reward investments.

A conservative 10% return on a 2 million dollar investment is a very nice 200 000. A conservative 10% return on a 20 000 dollar investment is just 2000.

If you're not born rich in this world, there are but a few doors that are open to you to try to improve your station in life. Hard work will never help you out of the hole. Not even dangerous work. Nor will an education. At least with high risk investment you have a fair chance, and at worst you loose your savings and are back where you started. You're not going to lose your life or your limbs.

[abustamam]

Anecdotally, I know more people who have clawed out of poverty with hard work/education than I know people who got lucky with an investment. And I know plenty of non-poor people who got lucky with investments via IPO or crypto.

> at worst you loose your savings

This is a pretty optimistic take on how much money people who live paycheck to paycheck can actually save. I'd probably suggest that poor people with savings start a business over investing.

[carlosjobim]

Hard work is the first stepping stone, to crawl your way out of complete poverty. Where would a person otherwise get money to invest. But that doesn't mean you're out of the hole.

What I'm talking about are things like being able to own your own home without being born into it or getting it from inheritance. That is a big gamble trying to do with just hard and smart work.

> I'd probably suggest that poor people with savings start a business over investing.

I'd like to adjust that: Starting a business is a better option than hard work, because with your own business you can actually get a good return on working hard and smart. But unless you're a business genius, it's a good idea at one point to invest your proceeds into the stock market rather than investing all back into your own business.

[groundzeros2015]

It’s because you just lived through a 10 year period of the best growth for passive, and there is a tremendous amount of marketing online for passive.

I don’t disagree with your basic idea, but not being able to articulate alternatives so that you know when they make sense is going to hurt you.

We are possibly seeing a major failure mode for passive for the first time.

[SubjectToChange]

>and there is a tremendous amount of marketing online for passive.

There’s a lot of advocacy for passive investing because it’s practically the only good option for retail investors. Managed funds can actually afford to advertise.

There are problems with passive investing becoming such a large portion of public investment, it is practically corporate welfare. But when the alternatives are at or around 2 and 20, with most performing worse than index funds, it’s irrational for the average person to do anything but passive investing.

[groundzeros2015]

Passive has been good and I’m mostly a passive investor. I’m arguing that we are seeing structural changes which expose you to more risk and may make alternatives more appealing.

> because it’s practically the only good option for retail investors.

If you’re hearing about something, it’s because someone organized that message

> Managed funds can actually afford to advertise.

Have you seen how much money and corporate influence Vanguard and black rock have?

> with most performing worse than index funds

At the same risk level?

[abustamam]

That's true, but what are the alternatives? Personally I do have alternative investments (crypto, random held stocks) but it's because it's fun money - if it goes to zero, I'm not going to lose the house.

If it's the first time it's failing then there's really nothing anyone can do to prepare for it, and I certainly wouldn't recommend laypeople to try to time the market.

[groundzeros2015]

Alternatives include - paying a mutual fund manager (who will skip the SpaceX ipo) - other assets classes like real estate and bonds - less diversified stock holdings

In this story we determined that S&P is going to choose a path different that other ETFs. Does that mean these ETFs differ in quality? Which should you pick?

[abustamam]

A properly diversified portfolio should have bonds even with a lower risk profile. Some even include real estate now, since REITs are so popular. Target date funds do this automatically, and rebalance, cheaply.

Mutual funds aren't bad but the average person won't realize that they're paying a percentage of their assets, not a flat fee, to the manager. If the fund class can beat the market by more than that percentage then it could be worth it, otherwise pick an ETF that has the risk profile you can tolerate. But the first step would be to understand that.

[zajio1am]

> for example I invest in an ESG index for environmental, social, and governance, ie no weapons or drugs

So, no weapons for Ukraine?

[abustamam]

Seems like my tax dollars do plenty of that without my explicit consent. No need to invest in that more.