I Sold My Entire Investment Portfolio One Hour Ago | Hacker News Reader

I Sold My Entire Investment Portfolio One Hour Ago

entrepreneurshandbook.co

20 pointskaranke16 comments

The problem I have is pulling my money out immediately reduces it by 15-30% because of taxes. So for every $1000 in stocks gains, I will only have $850 to invest in the future. So taking money out is a guaranteed reduction of your investment portfolio.

That portion is a basically a sunk cost. You don't have that money you're just holding onto it for the taxman. Assuming any future gains will be taxed at the same rate, in effect you are not earning anything more off of it by holding it as the proportion of tax will be the same. The only way it would be different is if you expect the tax law to change in the future in your favour.

Your tax bracket could change also if you lose your job or retire, or suffer other losses.

Wasn't clear from the article whether he was talking about a tax advantaged account or not. In a tax advantaged account his strategy would have more advantage.

But did he consider that Jerome Powell has a money printer that goes brrrrr?

Good one, very insightful. Inflation should definitely be considered as well.

Note that while interest rates remain low almost every asset manager is going to remain invested. So are people like Buffet. Invest in Index. Don't pick stocks.

Interesting you should say that. That is exactly my theory as well. If you sell you have to put your capital elsewhere. Historically, interest rates gave a decent return in cash and bonds. That doesn't exist today. That's why you're better off sitting out any falls - as the one in March has shown, they are very short term.

Sitting in USD is more risky than tech.

Tech is still the future. Recession isn’t hitting tech as hard as others, recent financial results prove that.

The dollar is being printed on a massive scale. That’s what’s pushing up stocks. It’s not a bubble as much as it is moving the baseline value of stocks relative to USD.

Property will also be going up in the near future (this has already happened in today’s super low interest rate environment). Property historically holds its value; this article reeks of recency bias. Because most investments aren’t doing well now, real estate is an attractive place to park all of those “on paper” printed gains (which are not real gains, of course).

Nitpicking, the pandemic was hardly a black swan. People around the world have predicted it since forever, it was only semi-black swan in the amount of preparation for and willingness to deal with it that the US mustered.

I don't get this. Then no crisis is ever a black swan, as we're always expecting the next one. Financial crises, pandemics, meteorites, terror attacks? All expected.

A black swan must be an event that is unpredictable in the sense that it happens suddenly with little warning signs in the immediately preceding period.

Largest analysis mistake here is looking at past events CDOs as mentioned and believing the exact same thing will happen again. The outcome won’t be the same, because if it were to be then the fact that we know the outcome would be the same changes everyone’s investment decisions.

Sitting on cash is almost universally a bad idea in my opinion (more than a few months of emergency or if you are saving for something). It means you think you can predict the market. You can’t.

The author makes some good points, but glosses over USD valuations as a risk factor.

Yeap. You’re never « exiting » all the markets. You’re moving from one market to another. Betting on the dollar vs company’s share is one strategy, but i wouldn’t say it’s totally risk-free either in the current environment.

It cannot be described as risk free. It is 100% guaranteed to lose money to inflation at the bare minimum.

A 100% cash portfolio is highly exposed to inflation.

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