Retirement Funds Upside Down

What Was 100 on 1/1/2022, Is Now 83

Mar 06, 2023

∙ Paid

You Cannot Exchange Statistics For Groceries

The crossfire at this point in time is incredible.

Overall earnings lower
Interest rates higher in the very recent past, refer to the prior editions. A primary explanation of the relative stability? Interest rate stability (it is NOT only level that matters). That creates problems for risky assets (calls into question, again, the idea of “there is no alternative”).
Vanguard reports that the average retirement plan balance declined 20%, Fidelity says 23%. This is a good time to remind you that while markets are definitely higher so far in 2023, you are nowhere close to where you were on January 1, 2022. If you were -20% in 2022, and are up 4% in 2023, then you have 21% MORE to go, FROM HERE.

In the long run…

Yabit, there are bills to pay, and life happens. So while you could’ve stayed, as Vanguard says has occurred, real life can be somewhat different. I am not stating that the long-run statistics are wrong, I am challenging the idea that you blindly stick to theory and distortions that result from blindly following summary statistics.

The point here is that there is theory and then there is practical reality as it applies to living people. You aren’t the only one,

Probability-Adjusted Exercise = Every Personal Finance Topic

So is poker. It’s probably a stretch, but the saying exists: “Poker is life.” Seems extreme.

But, this video is exactly what I would say, just change the topic from poker to financial anything. Seriously.

Marle (above) Wants You To Sit Down

There is a huge different between:

I am a poker player.
I know how to play poker.

Do you know why I don’t play expensive poker? The entry fee for a tournament is well over $1000 (the payout can be >$200,000. Yeah, but the competition actually knows how to play:

Professional poker is now run by people with game theory optimal (GTO) simulations that run all night. The people have backgrounds and time to study all day and night, running computer simulations. The idea that I would consistently, over a period of 5 hours, beat an Eastern European, 19-yr old math whiz, with nothing but a room of computers, and time?
Have I beaten very good players in a single instance? Yes.
Can I beat them and 2000 others, over 5 hours, consecutively? HAHAHA. Let me stay over here, in my lane.
The allure of poker is that people win a single hand, think they can compete. This makes poker very different from chess, you are not beating a grandmaster, even in a single instance. Poker then, is a far better analogy, when you can be fooled by a single random event.
Oh, hello, the first books you should read about investing. Links are here and here.
6. I am not smart enough to invent/create these books, but I can summarize them. Ah, perhaps I already have done this, the entire time, right here on this newsletter.