I wish I didn't know

02/28/2020 in prediction, finance using tags predicting the future sucks

What is financial advice? Should you even listen to other people’s advice if you have no understanding of the fundamental concepts surrounding finance?

Every market “expert” will tell you that you should never time the market.
They’re just training you to be their next bagholder. That’s all that advice really means. At this point, it’s a race to see who will be left with the bags when it comes to buying into a recession. It’s very likely that the 401k was designed to be just that, the bagholder account for the average consumer who doesn’t even have a clue about markets.

Your money is locked up in equities until you are 59 1/2 years old and it’s very likely that you will encounter 5+ recessions in that timeframe. Hopefully you’re also in the credit expansion timeline on the long term debt cycle when you invest in a 401k.

And then there’s the flawed advice (an absolute truth at this point) of buying dips. If you would have followed that advice in Japan during the Nikkei’s rise you would have still lost money up until 2020. Japan has been stuck in a credit contraction phase for as long as 30 years. Stocks will keep going up, until they don’t. And then when they never do for 50 years, you kind of wonder why you have your money in equities in the first place. Buy and hold worked with the S&P 500 over the last 30 years but it did not work for the Nikkei for the last 30 years. Instead, Japanese debt simply keeps increasing.

I’ve learned to never take anyone’s advice when it comes to investing. “Pros” can never give you good advice since you’re typically the one buying and they’re the ones selling. Truth appears to fly straight out the window in the financial world. The right information becomes an asset at this point, so why would you give something like that away for free?

The best financial advice I have ever received is through understanding the theoretical ideas behind interest rates and studying the subject of finance.
By reading up on the theories behind finance, you can make more informed decisions yourself instead of expecting someone else to handhold you there.

Finally I would like to humor you all with the current treasury yields as of February 28, 2020. I think it’s about to implode like it did in Japan. Heck, we may even see negative interest rates in the US, as bond buyers rush to the US treasury as their own treasuries already have negative yields.


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