New answers tagged

1

There won't be a concept of a dollar cost averaging equivalent for continuous compounding unless there is a corresponding concept of a continuous function for the market price of the bitcoins that can be agreed upon by buyer and seller. With a mortgage it's easy. We know the equations that are behind mortgages. With a market, it is harder. The "...


2

Can you clarify what you are trying to achieve? Keep in mind, if you were getting 100% annual interest at a bank, a yearly CD, no compounding, returns $200 (duh). Monthly compounding jumps to $261, daily, $271.46. But "continuous", $271.82 (a multiple of the number 'e'). The concept of continuous compounding doesn't really apply when we talk about ...


2

Per your question and subsequent comments: When implied volatility increases, so too does time premium. And conversely, it contracts when IV decreases. With an IV of 280%, your puts were incredibly expensive. If you input all of the variables into an option pricing model, what you experienced was normal. IOW, with a share price drop of $3.80 along with an ...


2

I assume by "negative balance" you mean a loss from your purchase price. The puts still have positive value. The implied volatility of MNOV collapsed today. I don't know the latest company news, but it appears that the developments leading to Monday's surge in the stock are now somewhat reversed, in the market's perception. As of Monday, risk was ...


1

What you're describing is an investment strategy known as buying on a Really Bad Day. This is discussed many times on the Boggleheads forum, and is well worth researching. I think that the general consensus is that the RBD strategy doesn't beat the baseline much. And certainly not that much to worry about. Differentiate this from a simple re-balancing ...


1

Whenever there is an economic downturn (as evidenced simply by a majority of economists saying: "hey, we're in a downturn") you invest your money into a diversified portfolio that closely resembles the economy as a whole. Now you wait until there is a upswing (as evidenced simply by a majority of economists saying: "hey, we're in a upswing&...


1

The main problem with your proposal is that the length of bull markets vary hugely, and can extend for more than 10 years. If you cash out the minute some economist or news outlet says we’re in an upswing, then you’ll miss the vast majority of gains.


0

I found my answer elsewhere: No it is not viable as an investment strategy. I guess what I'm asking is: Could you leverage the fluctuations by themselves, without knowing anything else but: "what goes up must come down and vice versa". Yes you can identify predictable price fluctuations in many corners of the economy. And no, "knowing when ...


2

You're mistakenly thinking that good news in the present indicates bad news in the future, and bad news in the present indicates good news in the future. In reality, the expected return of the stock market is pretty much independent of what has happened before. There are some correlations, but they're too weak to really suggest any viable strategies other ...


1

Also worth noting on top of these other excellent answers that this way of thinking can also get you into weird gamblers fallacy territory quickly. A random walk on coin flips has substantial dips below expectation (eg long runs with many more tails than heads and vice versa) but buying heads after long strings of tails isn't a positive expectation bet even ...


5

Whenever there is an economic downturn (as evidenced simply by a majority of economists saying: "hey, we're in a downturn") you invest your money into a diversified portfolio that closely resembles the economy as a whole. Now you wait until there is a upswing (as evidenced simply by a majority of economists saying: "hey, we're in a upswing&...


3

More or less, you reach this goal with rebalancing: If you hold, say, 70% of your assets in stocks, 20% in bonds and 10% in cash, when the stocks go down by 20%, you readjust by buying more stocks until you have the above ratio back. OTOH, if your stocks go up by 30%, you readjust again, e. g. by selling some of your stocks. The same holds for bonds. The ...


0

Assuming that you must eventually convert this money to EUR, follow the Law of Large Numbers. Pick a time period you can live with, and do multiple transfers over that period. Each transfer should be the of same amount, and with the same number of days between transfers. If today's exchange rate is unlucky, and it goes up later, you won't miss out completely ...


5

First you had 650€ and no asset. So your net worth was 650€. Then you bought the asset. You then had 0€ and an asset worth 650€. Your net worth was still 650€ Then that asset increased in value, so you now had 0€ and an asset worth 750€. Your net worth was 750€, which is 100€ more than you started with. You then sold that asset. You now had 750€ in cash and ...


6

This is yet another sunk cost/anchoring/status quo question. You have a choice between investing your money in the stock market or investing it in MYR. You seem to be letting the fact that you're currently invested in MYR to bias your thinking. If you were in Europe, had no involvement in MYR, and hadn't had this exchange rate loss, would you be looking at ...


1

It sounds like you're asking an XY problem. You want to buy stock with a different currency than you have, and then think that after you get your money exchanged you'll have more money to invest? Maybe I just haven't read the question correctly, but what you are asking is that you want to exchange one form of finances for another so that you can immediately ...


7

The EUR currency is a red herring. You happen to use it as a medium to buy the stock fund, but your return will be just as if you were able to buy the same fund in MYR on a local exchange. So the real question is whether the fund (stock index) priced in MYR will return more or less than the 1.5% interest rate. As a general rule, stocks return more than cash ...


27

Fundamentally here you're asking for a sound prediction on direction of currency markets (and in a secondary respect the direction of the stock market). No one credible who even vaguely knows this will tell you, so you're not going to get an accurate answer to the specific question from anyone who isn't an idiot or a fraud. Outside of this point, you clearly ...


2

I think that looking at long term historical data has value here. I created a spreadsheet which took the S&P returns for Years from 1900-2018, and calculated the 15 yr returns starting with 1919 to have the last 100 rolling 15-yr returns. Then I sorted to see how these numbers were distributed. The top 50 results were over 9.88%, with the highest being ...


1

A quick sketch n = 12 s = 240000 Periodic rate and periodic payment for 15 year and 30 year mortgages p15 = 2.852/100/n pp15 = (s p15)/(1 - (1 + p15)^(-n 15)) = 1640.37 p30 = 3.568/100/n pp30 = (s p30)/(1 - (1 + p30)^(-n 30)) = 1086.84 The 30 year scenario can save $553.53 into the fund at the end of each month. sv30 = pp15 - pp30 = 553.528 The 30 year ...


0

At least in the US, plans of this sort usually include at least one low-fee index fund that invests in a wide range of large companies, a fund that invests in a range of bonds, and a money market fund. Many people want some collection of those to make up a substantial portion of their portfolio. One can invest in a pension fund with money that you want in ...


6

Grade 'Eh' Bacon has already given a strong answer, which applies well to UK pensions. But to address your specific problems:- Too restrictive (you can't use the money until an government set age, if you take it early, there are heavy tax implications) You can retire and take a personal pension at 55. That's early enough for most people. The government ...


1

To answer your first question - the rule changes/evolves overtime. As of recently, it's been loosened for asset class investments such as private equity and venture capital. The primary goal behind the Volcker rule was to separate business activities between the investment side of a bank and the commercial/consumer-facing side so as not to use depositor's ...


12

There are a few issues with your assumptions, which significantly downplay the benefits broad investment vehicle you are calling 'pensions'. I will tackle 3 of them: Tax advantages: this is jurisdiction dependent*, but you are assuming the initial investment is 'not taxed', and that the future withdrawal is. Let's keep that assumption, and assume a 30% rate ...


1

I've used a variant of this strategy when gambling on highly volatile instruments, e.g. bitcoin in 2017 or leveraged put options in 2020. What I've done is sell half of the position once the price doubles. That way I've recovered the initial investment and feel more free to wait to see what happens with the remaining money. However, the strategy only makes ...


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