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birb_cromble  3mo ago (text post)   1814 thread views

Weekly Finance Thread

Since a lot of us here have expressed interest in not starving to death in a gutter, I figured I'd start a weekly thread to discuss financial matters.

Ground Rules

  • Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
  • Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
  • Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
  • Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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Honestly yes you can take large losses and be profitable. That’s something they lie to you about in the trading books. Many strategies do just fine with it.

But I think this conversation was more about investing than trading. The market often does do mini crashes (sometimes big %) then end up fully mean reverting and then going up. Someone investing their savings and not trading would be very poorly served with stop losses. We’ve had many crashes that then V-shape back up. The correct thing for them to do to manage risks is diversifying, maybe risks-parity, and keeping beta down to their risks tolerance.

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