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0 pointssambe11y ago0 comments

I think this and the grandparent miss the point. The paragraph starts "it's too hard". Too much choice, lack of metrics, lack of clear comparisons can make things as hard as no choices. The availability of discount brokers doesn't solve the problem, as evidenced by the number of people making mistakes.

"Most people either pick individual stocks and bonds and expose themselves to high volatility, or pay very high fees to mutual fund managers and lose to the index anyway. Most people are also non-experts when it comes to portfolio rebalancing and tax optimization."

Education, clear UI, consistent metrics and prioritisation are all potential issues. Do all these services exist outside of your country? What if I move countries? How do I explain it to my mother? What if I only have $1000 to invest?

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5 comments · 3 top-level

danielweber11y ago· 2 in thread

Too much choice

So we are going to make another choice?

What if I only have $1000 to invest?

Put it into your savings account because you need a rainy day fund.

When you have $3000 to invest, put it into Vanguard's S&P 500, and call it a day. You are already beating more than half the managed funds out there. You spend time with your kids.

This is slightly more complicated than YO, but only slightly.

xur1711y ago

Not another choice, just a simpler way to choose funds, with recommendations, etc. Wealthfront and a few others have offerings that do a pretty decent job at this, but they don't cover 401k plans, and their fees are high for something that should be set and forget. Target date funds are actually pretty good at doing this, and some have relatively low fees.

A lot of the 401k providers just dump a list of 40 funds on your lap, and let you figure it out, but it's information overload.

I really want something that can help me decide what type of risk I can handle, and then properly choose funds / balance between all of my accounts. Financial advisors are able to do this, but software can do it better and cheaper.

Basically, I want something like Mint that connects to all of my investment accounts, and sends me an email once or twice a year with specific instructions for rebalancing.

calgaryeng11y ago

I think the app I'm working on (https://www.RetirementPlan.io) is in the right ballpark for what you are asking for. Can you try it out and provide feedback? It's free while in beta.

It's missing the Mint-style auto-connect, but it largely does the rest of it (the actual hard math).

foobarqux11y ago

The paragraph I quoted and replied to was pretty explicit, claiming that discount brokers selling index ETFs don't yet exist.

Telling people to just invest in an S&P500 ETF (metrics and comparison don't matter because people don't understand them anyway) doesn't seem like a great business, financial writers are already advocating it pretty regularly and investment in index ETFs is growing steadily.

jarek11y ago

> Too much choice, lack of metrics, lack of clear comparisons can make things as hard as no choices.

Sure, but next ask "why." What is the motivation to provide metrics? Who will compile and compare them? How will they stay impartial? Who benefits?

We don't even have as much as a comprehensive internet offer comparison.

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