DamnWolves!
kiwifarms.net
- Joined
- Jan 30, 2021
Good post, but crypto currency is decidedly not more stable over the long term than the US dollar. Remember, the US Dollar is always worth what the US Government says it is. The US Government has immeasurable tools at its disposal to ensure the value of its dollar; we aren't talking about Ghana here, we're talking about one of the world's economic superpowers. Compounding this is the fact that many countries hold USD as a reserve currency, and some like Ecuador said "fuck it, we'll just use the USD as our currency".
We have seen bubbles and crashes before and if you'd stuck through the trough of 2008 without cashing in your 401k like a moron, you'd be even by 2012 and way, way up by 2021. Even the greatest crashes in history don't hold a candle to how fucked a big crypto crash could leave you, especially if you can't afford to wait out the crash.
If you're old and are afraid you're going to die before the next business cycle, it's time to get into low return, stable asset mixes, which is why pension funds do exactly that. Everyone else needs to relax and realize that so long as you're invested in real companies with real products, the market will bounce back. The trick is in timing your sale so you're holding more cash at the crash, then going on a buying spree.
The secondary mortgage market is very fat right now; they're right back to securitizing mortgages and selling them to the general public. Yet another reason the Fed is being so careful about rate hikes... 50 basis points to the interest rate means a ~15% increase in the price of mortgages, which means a ~15%+ drop in the price of housing; more if it causes speculators to drop out of the market or default.
We have seen bubbles and crashes before and if you'd stuck through the trough of 2008 without cashing in your 401k like a moron, you'd be even by 2012 and way, way up by 2021. Even the greatest crashes in history don't hold a candle to how fucked a big crypto crash could leave you, especially if you can't afford to wait out the crash.
Gold returns something like 3% over the long term; it's marginally better than a t bill, but with more volatility.
Bitcoin is "the original cryptocurrency". It's like asking "what's the difference between the US Dollar and the South African Rand?". Technically, not much. Psychologically, lots. Look at what happened to something like ETH or LTC during the last major crash.
Is this a real question? Why do you think people tell you to not invest more than you're willing to lose, or in this case, more than you can afford to wait out?
If you're old and are afraid you're going to die before the next business cycle, it's time to get into low return, stable asset mixes, which is why pension funds do exactly that. Everyone else needs to relax and realize that so long as you're invested in real companies with real products, the market will bounce back. The trick is in timing your sale so you're holding more cash at the crash, then going on a buying spree.
So long as you're prudent about it. It used to be that you could pick up land at the urban-rural boundary of an expanding city, run a driving range or a u-pick raspberry farm off of it, then sell it to a developer for $50 million once the suburbs had reached it, but developers have all that land in their own inventory now. Buying a house in a nice neighbourhood with good schools is almost never a bad investment in the long term; if you can afford one that's slightly nicer than average, that's even better. Land is the one thing they don't make more of. If you have a couple million and you're risk-tolerant, you could potentially get involved in a private equity deal for a development; those can return 20% p.a., but you carry the risk of ending up with nothing for 5+ years.
Banks get money even cheaper than they give it out for. Fractional reserve essentially means they have infinite money to lend out, and even 3.25% is better than 0%, since banks only need to pay back the nominal principal + a very tiny amount of interest.
The secondary mortgage market is very fat right now; they're right back to securitizing mortgages and selling them to the general public. Yet another reason the Fed is being so careful about rate hikes... 50 basis points to the interest rate means a ~15% increase in the price of mortgages, which means a ~15%+ drop in the price of housing; more if it causes speculators to drop out of the market or default.
