Investing 90k

[PsychedelicEagle]

8 hours ago, Leo Gura said:

You don't need to do anything when dollars are being printed.

True for nominal values, but what about the opportunity cost? This statement assumes inflation-adjusted stock returns during money-printing periods are negative. I'm not sure that is true.

10 hours ago, Leo Gura said:

You hold gold until you see a market sell off, then you buy cheap stock.

The core question is whether to time the market — I'm clearly against it. Many reasons, but the ones that come to mind:

1. It exposes you to your own cognitive biases.
2. It exposes you to life circumstances that prevent optimal decisions.
3. Attention tax: time and energy spent tracking short-term patterns, policies, and trends. That energy could go into yourself or your own projects — creating real value, which likely beats any risky margin from timing.

[Leo Gura]

7 minutes ago, PsychedelicEagle said:

True for nominal values, but what about the opportunity cost? This statement assumes inflation-adjusted stock returns during money-printing periods are negative. I'm not sure that is true.

Stacking gold is the low-risk, low-worry solution.

I am not saying it will beat good equity investing. But the risk is much lower. Much less worry.

Tripling your money in 10 years is a very good deal. In 10 years you will wish you got that result.

Quote

The core question is whether to time the market — I'm clearly against it. Many reasons, but the ones that come to mind:

1. It exposes you to your own cognitive biases.
2. It exposes you to life circumstances that prevent optimal decisions.
3. Attention tax: time and energy spent tracking short-term patterns, policies, and trends. That energy could go into yourself or your own projects — creating real value, which likely beats any risky margin from timing.

Hence stack gold.

Stacking gold is the Dummies Guide To Investing.

You don't have to time gold too much, just don't buy at the peak.

Edited 13 hours ago by Leo Gura

[PsychedelicEagle]

2 hours ago, Leo Gura said:

But the risk is much lower.

Gold is a medium-to-high-volatility asset AFAIU. Hard to categorically say the risk is significantly lower than investing in a neutral, fully-diversified, global ETF.

Again, gold has no cash flow, which — in addition to no compounding mechanism — means no mechanism pulling price back towards a fundamental value, so multi-decade dead periods can occur. For example, in the 1980–2000s, gold lost ~70% of its real purchasing power from 1980 and didn't recover for two decades.

Stocks, on the other hand, are anchored to earnings: if the price falls while earnings hold, the earnings yield rises, and that higher yield mechanically attracts capital. It's a slow mechanism but at least it's there.

Personally, I'd be very uncomfortable if most of my money would be invested in a single, non-productive asset with such characteristics.

2 hours ago, Leo Gura said:

Hence stack gold.

Stacking gold is the Dummies Guide To Investing.

You don't have to time gold too much, just don't buy at the peak.

The solution to avoid timing the market is not to avoid the market altogether. That would leave substantial gains on the table. The solution is to consistently invest in equity without trying to time it. If you consistently invest in a neutral, fully-diversified, global ETF, you don't need to time it at all.

Edited 11 hours ago by PsychedelicEagle

[Nilas]

13 minutes ago, PsychedelicEagle said:

The solution to avoid timing the market is not to avoid the market altogether

Your points make sense, but we’re assuming that the market is on the verge of a crash similar to the dot-com bubble or the financial crisis. The MSCI World fell by as much as 60% back then. It took about five years to recover from that. It seems sensible to me to at least time the entry at this point. Investing 100k at the peak of the financial crisis vs. 100k at the bottom makes a huge financial difference. 

[PsychedelicEagle]

11 minutes ago, Nilas said:

we’re assuming that the market is on the verge of a crash similar to the dot-com bubble or the financial crisis.

Making these assumptions = timing the market. Which is fine, but then all the previous drawbacks I listed apply: cognitive biases, unexpected life events, attention burden. By continuing with your assumptions you are subscribing to these. Just pointing it out.

Also, under your assumptions: when will you invest back? By feel? At what price will you de-concentrate your stock allocation from non-tech to a neutral one? These are questions you have to have answered now, if you want to avoid investing based on emotions, perceptions, and the subset of information that reaches you in the future.

Edited 10 hours ago by PsychedelicEagle

[Elliott]

"Timing the market", if governments print money they can keep the market afloat, that's why they do it. "Government Stimulus".

Timing the market is not investing, it's trading/gambling.

Edited 10 hours ago by Elliott

[Leo Gura]

Investing at historic peaks in the middle of AI mania is just not smart.

You could lose 80% of your money in 1 month.

The upside is low, the downside is huge.

Edited 4 hours ago by Leo Gura

[PsychedelicEagle]

That's why you only invest (in stocks) money you'll need in 10y or more.

All-time highs are the norm, not an anomaly, because markets trend upward.

Also, "Lose 80% in 1 month" massively overstates the tail risk of a diversified index.

The fact that OP will be investing money throughout this year makes no difference VS an investor that has purchased stocks a decade ago and is holding their position. Do this mental exercise — flip the scenario: what would you do if you had purchased stocks 10y ago and still had your position? Sell everything, remaining with 0% equity? Do that at every peak and you're guaranteed to have mediocre results.

The truth is that nobody knows whether we're in the bubble, and — most importantly — where in the bubble we are.

The secret to long-term success with investing is to delineate a strategy and follow through with that.

High PEs tell you essentially nothing about whether the next year will be good or bad. They do suggest the average annual return over the next decade will likely be more modest — a reason to calibrate expectations and allocation, not a signal to sit out completely.

Edited 59 minutes ago by PsychedelicEagle