Hacker News Reader

Comment by ryandrake | Hacker News Reader

As someone who has been burned several times by the stock market and supposedly safe index funds, I have no idea where I would put my savings (if I had any substantial amount). Stock market / mutual funds have a high risk of loss. Bank accounts will not grow (and will lose eventually due to inflation). Inflation-adjusted savings securities seem like the best bet, but they won't grow. There's no safe return anywhere anymore.

View on HN

>As someone who has been burned several times by the stock market and supposedly safe index funds...

I'm curious to know what this means. You can only get "burned" in index funds if you pull your money out when the market is down. Are you investing money you need to pay the bills?

Bad timing. I'm sure the stock market is fine for people with an infinite time horizon, but I no longer trust it as a place to park savings for 5-10 years that you want to grow in order to buy a house or spend on grad school.

You are not alone. If you look at the "target retirement date" funds Vanguard etc. run you'll see that by the time the target date is 5-10 years out they have shifted largely to bonds to provide defined income.

Sounds like you need better advice. Most advisors will tell you that 5-10 years isn't quite long enough for the risks of stocks to pay off. Sounds like you wanted medium-term bonds instead of stocks!

> no safe return anywhere anymore

Just means your risk profile is too low. As detailed earlier, the central banks literally don't want you to do the things you were considering doing. Their distortions of the market are not arbitrary.

They want you to make private equity investments (the ones that don't come with hundreds of pages of disclosures), they want you to buy corporate bonds.

They want you to do things that actually put money back into the economy, and give a potentially higher return with a higher risk of loss.

The line between investing and gambling has always been a social construct. You hop into derivatives and even the "positive vs negative expected value" distinction falls apart.

There never was any safe return anywhere. It was all an illusion. Even US government bonds carry some risk once you account for black swan events across a sufficiently long period of time.

Reply on news.ycombinator.com