How do you invest your savings?
(Senior Chimp, 25
Points)
on 8/30/07 at 10:38pm
Mutual Funds, ind. stocks/fixed income, derivatives.. alternative investment vehicles....? through ur company?





Food for thought: useful
Food for thought: useful diversification for someone in IB would be a position short the market in general. Remember that your bonus is tied to the Street's fortunes.
ya ok dumbass
ya ok dumbass
...
I brought a few dry cleaners in various sections of Houston from a guy that ran out of capital.
WSO Conf - June 29, 2013
banklove, you're not cut out
banklove, you're not cut out for finance if you think the advice I gave is not absolutely correct in the very definition of diversification. Same reason people shouldn't own a lot of stock in the company they work for, regardless of performance incentives or whatever - if the company goes in the toilet, not only do you lose your job, you also lose your investment. Every asset you own and every incoming cash flow can be and is a source of financial risk, the point is to play them off of each other. Plus you'd be thanking your lucky stars if you poured a little bit of your first year bonus (paid July-ish) into a supershort fund and the market tanked a thousand points or so a month later. It is easy to be right in hindsight, of course.
Now, I'm not saying that it's not a losing bet by itself, because the market has trended up over the course of history and will probably continue to do so. But that doesn't mean it won't hedge your risk.
I'll agree that perhaps shorting the market is not extremely palatable, but a significant cash position would also reduce your exposure to the market risk in your bonus. Debt might not be a bad bet if you think the market has overreacted and you want to take advantage of high yields and low prices on some of the weaker paper.
Take it with a grain of salt, I'm extremely risk-averse by nature. Don't attack me for proffering an idea, if you've got none better.
ballyho makes sense. i was
ballyho makes sense. i was skeptical at first but hes not saying to short the entire market hes saying to hold some short positions as part of a diversified portfolio, particularly in financials (though i believe now would not be a good time to short financials as they potentially may be at a low. but if i wanted to short financials id buy the leveraged proshares etf SKF) i wouldnt keep a significant amount of my portfolio in this short position as its very risky to hold a short position for a significant amount time... maybe 5-7% should be allocated to holding shorts
ballyho makes sense. i was
ballyho makes sense. i was skeptical at first but hes not saying to short the entire market hes saying to hold some short positions as part of a diversified portfolio, particularly in financials (though i believe now would not be a good time to short financials as they potentially may be at a low. but if i wanted to short financials id buy the leveraged proshares etf SKF) i wouldnt keep a significant amount of my portfolio in this short position as its very risky to hold a short position for a significant amount time... maybe 5-7% should be allocated to holding shorts.
but i think options strategies would be a better idea to use for protection rather than holding a short position. i dont have the different spreads memorized but i know there a lot of possibilities out there
Ballyho is absolutely
Ballyho is absolutely technically correct. I suspect the reason that most don't do this is because working in the industry gives you knowledge (maybe not technically inside, but very close - let's call it an advantage) of some investments. Also, with owning company stock, you do have inside knowledge so you'd be crazy not to own/sell it if you knew more than others (within the legal framework).
That said, it's probably just overconfidence by another name.
In a raging bull market,
In a raging bull market, just randomly punt. In a crashing bear market, just randomly short. No knowledge needed. No skills needed. Market is irrational.
... what? the only part of
... what? the only part of that statement that made any sense were the last three words. yeah theres a bull market but oil inventories spike 3x expectations, i wouldnt want to "randomly punt" into an oil company stock.
and rarely is there ever a "raging bull" or "crashing bear" market, evn during the recent subprime disaster there were days when the market was up, i made money during that fiasco by buying on the bad days and selling on the good days, even if it wast he very next day. the markets are marked by high volatility in times of panic, rarely a straight plummet
here's the problem with
here's the problem with being short. lets say you own rydex or something else that has 2 for 1 exposure short the market. the market rises 10%, then falls back to 0%. are you flat on your position?
I wont go as far as to call
I wont go as far as to call ballyho a dumbass but trampledmonkey, maybe. The market is comprised of a variety of companies with global exposure and . the fate of Wall Street is not always directly correlated to the state of the market (and vice versa). I think your concept of diversification is slightly skewed and regardless of Wall Street affiliation time/studies have demonstrated that market positions have consistently outperformed other assets classes on a risk adjusted basis (and thus should be held in a diversified portfolio).
Trampled, thanks for explaining the market it all seems so simple now.
Savings? What savings?
All my cash is in BEER and HOS, so no need to worry about diversi-ma-fication here.
Note: Above is a joke.
anybody invest in CDs?
anybody invest in CDs?
CDs/Treasury
CDs/Treasury Bills/Government bonds are supposed to be an essential part of any solid diversified portfolio, but honestly i dont mess around with that, if im holding onto anything for 6-12 months its an etf that tracks the S&P or large caps or something, im young and dont have a family to feed i can handle the risk
um.....
HSBC online savings. no time to manage a portfolio.
I might be the idiot in the
Re: I might be the idiot in the
and no one said youre just
The richest men in the world
Re: The richest men in the world
I'm not an asset manager,
It always cracks me up that
Re: It always cracks me up that
Whoever agrees with ballyhoe
Re: How do you invest your savings?
http://stylizedfacts.com/coruscation/
Re: Whoever agrees with ballyhoe
mfs and etfs
Thanks for pointing this out