Comment by tdalaa | Hacker News Reader

Comment by tdalaa | Hacker News Reader

The amount of terrible advice on here is amazing.

First crucial advice: don’t take financial advice off the internet from a group mostly made up of people who have never had a million dollars or more to invest. Ask people who can show you they’ve got millions more than you and have had them for years through ups and downs..

Second: there are a gazillion factors that goes into making solid investing advice; what’s your current living situation, what’s your 5 year outlook, 10 year outlook, ambitions in life (wanna retire soon or you’re planning to work and just have this as a long term nest egg), what’s your appetite for risk, do you need the money in the next 10 years (at all!), if you invested in something and markets suddenly crashes and your invest was suddenly worth 500k, what would you do, hang on and ride it out or sell? .. and on and on.

What matters is simple long term low cost investments, and then not touching shit no matter what happens. Hell, just buy cheapest sp500 index etf (vanguard or ishares or similar) and hang on for 20 years and you’ll be in extremely good shape.

What’s the timeframe OP should deploy the money in your opinion? The global stock market cap is close 1.17x global GDP. It’s very rare but if you invested at the wrong time in the SP500 20 years is not enough to recover.

With $1m you could very easily hedge your bets, I don't think OC is saying put it _all_ in an ETF that's pretty foolish.

To OP: Get a financial advisor ASAP, $1m is enough to justify it. You also have a lot of tax implications that you probably haven't thought of, a lot of work goes into avoiding taxes at those stakes.

Specifically, if you get an advisor, a "fee-only" advisor (charging a flat fee or hourly rate). Many (most?) financial advisors will be more than happy to charge you 1%/year or more for the rest of your life, which is going to be a major expense and drag on returns for someone with $1M+.

Why is it "foolish"? Serious question. There are 2300 ETFs in the US. They do many different things... Are they all foolish?

There are plenty of great ETFs. If you had a 20 year time frame, putting it all in a SP500 ETF is certainly not a bad option (though I would personally diversify to maybe 2-4 ETFs to get international and fixed-income exposure).

edit: See https://www.bogleheads.org/wiki/Three-fund_portfolio for an example of a simple, well diversified three ETF portfolio.

Not a comment about ETFs, but in general, the word "foolish" applies to someone entering the scheme, not someone running the scheme. And as is the way of humans, there are always enough people willing to be misled into bad decisions. In that sense, these schemes are very smart.

To repeat, this is NOT a comment about ETFs; it's only about where the word "foolish" goes.

Never put all your money in any one instrument even if it is a collection of many different things. The foolish part was 'put it in a single ETF'.

Honestly this whole thread is a dumpster fire I'm leaving this one alone.

This is terrible advice.

https://www.marketwatch.com/story/why-way-fewer-actively-man...

A vast majority of advisors (90%) aren't going to beat an index fund. You are just giving money away money by hiring an advisors.

Unless you want to pull offshore tax shelters or Real estate depreciation schemes its not super complicated to do taxes. Invest long-term and you are getting capital gains tax.

> if you invested at the wrong time in the SP500 20 years is not enough to recover.

That's simply not correct.

And important note here is that I'm obviously not advocating for investing 1 million dollars in a single SP500 ETF. For some people that may very well be the right thing, but if all you've got is 1 million dollars, you're taking a ridiculous risk putting it all into one thing, because what happens if some years down the line, stuff happens in your life, and you need to take out a good chunk of cash and it coincides with a terrible market, not a stellar combo.

So obviously basic diversification is critical, based on your personal situation. Can be accomplished easily with 3-5 cheap ETF's. Buy and hold for many years, until your life changes.

But as for SP500.. You could have invested in virtually any SP500 high, and as long as you can hang on for more than 10 years, you can almost not lose. Quite the opposite, sitting in cash is sure death, because you're gonna miss all the highs, sure the market may drop 30%, but that dip could have been in a period of 40% gain.. And you're losing out on the most essential part of making money long term: compounding interest. So.. Just invest, there's (almost) no bad time.

As for OP and timing.. I wouldn't know.. Way too many unknowns to give any kind of specific advice.

Someone else linked to the "three fund portfolio" and that's close to what most people should do. Get VTI, VXUS and BND in some ratio based on your age, personal situation, investment horizon etc, and then just let it sit.

You are right. I am used to look at the inflation-adjusted chart like (https://www.macrotrends.net/2324/sp-500-historical-chart-dat...). This is another context and I failed to mentioned this.

Here is an hypothetical example of someone who only invested just before a crash in SP 500: https://awealthofcommonsense.com/2014/02/worlds-worst-market...

Spoiler: time in market beats timing the market, historycally.

Don't do an ETF. Use your career knowledge to invest in companies and sectors you understand. Tech companies are doing great, and are already a massive part of the S&P. Why give away that advantage? Diversification (via ETF) is for people who are too ignorant or apathetic to choose better.

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