Perhaps if it was known as the Bengen rule, William Bengen would be more insufferable.
But judging by his appearance on the Rational Reminder podcast this week, the inventor of the (in)famous 4% rule (of thumb) is a delightful human being.
You’ll remember Bengen was the first to put statistical guardrails around how much a US retiree could spend from their savings to avoid running out of money.
The approach seems as obvious as the merits of index funds nowadays. But it was a breakthrough back then, when retirees managing their own assets all but used a Ouija board to tackle the problem.
Of course the 4% rule is subject to much debate. People say it won’t work at this time of paltry returns from fixed income. Bengen has warned his sums weren’t looking at early retirement or non-US investors.
Most interestingly of all, in a low-inflation world Bengen now believes US retirees can take out 5% a year with confidence.
Don’t get cross with me! Go listen to the podcast.
You should also check out the various withdrawal rate posts by my co-blogger The Accumulator.
More to spend
There was a further positive spin on retirement income from Christine Benz at Morningstar this week.
She makes the point that those retiring on today’s potentially lower withdrawal rates have almost certainly got much larger pots to draw on, too, thanks to the long bull market.
As a result, their actual spending budgets may not be much different:
To use a simple, admittedly arbitrary example, let’s say an investor retired in early 2011 with a $1 million 60% equity/40% bond portfolio.
If she were using the 4% withdrawal guideline–$40,000 initially with that amount inflation-adjusted by 3% annually–she’d have pulled about $460,000 from her portfolio over the past decade.
Meanwhile, let’s say someone who was 55 and had a $500,000 60/40 portfolio back in 2011 is ready to retire today. Thanks to market appreciation and assuming that she hadn’t been engaging in regular rebalancing, her portfolio is now worth about $1.4 million.
Even if she has to take a lower starting withdrawal of 3%, her larger balance means that her first-year withdrawal is about $41,722. Her first-decade withdrawals, assuming 3% initially with 3% annual inflation adjustments thereafter, would be about $478,000, roughly in line with the 2011 retiree’s.
It’s not quite apples to oranges, but it’s a worthwhile contribution to the discussion.
Bengen himself says in the podcast that precision is a bit moot. Any sensible investor will readjust if things go badly wrong. Like many advisors, he says his biggest challenge was to get retirees to spend their money, not it running out.
I believe there are many ways to skin this cat.
For example I’m still presuming I’ll convert to income producing assets if I ever decide to live off my wodge, much to the annoyance of some Monevator regulars. 1
Other readers are working off 3% withdrawal rates, or even lower. Perhaps they don’t want to be left behind by lifestyle inflation in the general population. Or they may be skeptical about valuations in the market, and fear a crash.
My view is thinking sensibly about this problem gets you 95% of the way there. After that, adapt as you go.
Yes, you need more money to start with. Yes, you’ll probably die with lots of cash left unspent. No, income-investing is not a superior strategy to total market investor from a returns perspective. No, I wouldn’t be owning individual shares in individual dodgy failing UK companies and expecting them to pay me through a forty-year retirement. Et cetera.[↩]
The Bitcoin network reportedly now uses more energy than Argentina.
Bitcoin is also far more widely owned than it was.
Long-term holders – or HODL-ers, in Bitcoin-speak – still own many of the 18.5 million bitcoins mined so far. It’s estimated 1,000 whales control 40% of the market.
But there’s a good chance you too have at least a bit of a bitcoin. And if you don’t then you know someone who does.
Perhaps you bought it just to get in on the fun? Or maybe you’ve been in since the beginning.
With Bitcoin refusing to die and becoming a more valuable sliver of your assets, it’s natural to wonder where it fits into your asset allocation.
How to think about Bitcoin in your portfolio
Already this article will have got some readers’ hackles up.
I have no idea what a hackle is, any more than most Bitcoin owners have an idea of how a peer-to-peer network verifies transactions across a public distributed ledger called a blockchain.
But I do know that if you talk semi-seriously about Bitcoin, hackles go up – whatever hackles may be.
Well this is not a post attempting to debate cryptocurrency in general – or Bitcoin specifically.
What I will say is that for something often decried as a fraud or a Ponzi scheme, Bitcoin seems remarkable resilient.
And I believe the case for Bitcoin as a store of value – digital gold, if you like – strengthens the longer it sticks around.
That’s because as it does so, ever more people believe the story, trust the technology, and decide they want in. It’s a self-reinforcing circle.
Yes, this makes it a construct of the human mind.
So what?
Gold is only worth what someone will pay for it.
Rihanna has 91 million followers on Instagram because 91 million minds see her value.
The pound in your pocket – or displayed on your smartphone – has value because you believe you can buy things with it, and that the government and the Bank of England will keep things that way.
There’s the same self-fulfilling quality to Bitcoin.
Three things to ask about Bitcoin
Bitcoin is one of those Marmite-y things that people love or hate.
I believe a framework for thinking rationally about Bitcoin in your portfolio is useful wherever you stand – and it can help move you towards a sensible middle ground.
Too many people are either all-in on Bitcoin, or else fending it off with scam-repellent barge poles.
Rather than fire emojis at each other on Twitter, let’s break down whether you should hold Bitcoin with three key questions:
#1 What do you think is the future of Bitcoin?
#2 Do you need to have Bitcoin in your portfolio?
#3 How much should you allocate?
Answer these and you should at least know why you do or don’t own Bitcoin, and where it fits into your asset allocation.
#1 The future of Bitcoin
We won’t tarry long on the future of Bitcoin. (If you can have your hackles up then I can refrain from tarrying.)
PhDs have been written on the future of Bitcoin. Yet someone uninformed will still quip below that it’s all a crock while another will urge you to dump your worthless fiat money ASAP.
It’s too big a debate for this ‘umble blog post.
Are you a believer, a denier, or an agnostic? This will play the biggest role in determining how much Bitcoin you own.
I believe Bitcoin has earned a role as an up-and-coming store of value. The potential becomes increasingly realised every day.
Bitcoin now has a pseudo-market capitalization of $840bn. It is being integrated by the likes of Mastercard, PayPal and Square. Tesla just bought $1.5bn worth of Bitcoin and you will soon be able to buy a Model 3 with it. Some institutions have begun accumulating.
None of this guarantees your grandchildren will be begging you for one more bedtime story with an eye on your private key, mind you.
It took millenia for gold to be established as eternally valuable. Warren Buffett still hates the stuff. Bitcoin will be controversial all our lives.
But for now I’m satisfied it works, has momentum, and is winning over ever more people as a place to park some wealth.
I’m less convinced by Bitcoin as a currency.
Most of its non-criminal advantages are being quickly replicated by fintech. And it’s far too volatile to be a currency as we generally use the term.
Sure you’ll be able to buy stuff with bitcoins. You can part-exchange with a house or a car, but we don’t call a Fiat 500 a cash substitute.
But for me Bitcoin’s potential as digital gold is enough to take it seriously.
You’ll have to make your own mind up.
#2 Do you need to have Bitcoin in your portfolio?
It’s one thing to see a future for Bitcoin. It’s another to believe you need it in your portfolio.
I see a bright future for dog-owning. I’m not about to open a puppy farm.
We can briefly consider four reasons for adding an allocation to Bitcoin: returns, diversification, global weighting, and FOMO.
Returns
Our portfolios are designed to grow our future wealth. Ideally we want to own stuff that will go up in value.
So let’s put aside all the earnest talk about money-printing and Bitcoin’s censorship resistance.
The reason we’re having this conversation is the price chart above. This thing has been on a flyer for years.
Owning Bitcoin over the past five years would have turned $1,000 into $118,000. That’s an annualized rate of 259%.
Please sir, can I have some more?
Nobody knows whether Bitcoin will keep rising in the future like it has in the past – and those who think it’s the future of cash have some explaining to do if it does.
But it’s easy to construct a plausible thesis for prices going higher still.
There will only every be 21m bitcoins, and 18.5m have already been mined. Several million have been lost. Millions more are being HODL-ed, and so rarely come into circulation.
This doesn’t mean you can’t buy a bit of bitcoin. Bitcoin can be divided many times. But the hard cap on total issuance is a positive for the price.
One sanity check is gold. There’s $10 trillion worth of gold at current prices. The value of all bitcoins mined is still less than $1 trillion.
If you believe Bitcoin can be the equivalent of digital gold then perhaps the price can rise at least ten-fold. That could underpin future returns.
Diversification
Ideally we want to add assets to our portfolio that go up in value over the long-term, but do so at different times.
This smooths the ride as different assets wobble. We can also earn extra returns by rebalancing between our holdings.
If the price of Bitcoin just rose and fell in sync with equities or government bonds, we might decide to stick to those more established assets 1 and skip the bother of crypto-whatnottery.
So far, Bitcoin has shown diversification benefits in a portfolio, says ARK Invest:
(Click to enlarge)
Note that an ongoing low correlation to other asset classes isn’t guaranteed.
Bitcoin is young, relatively speaking, and as it gains more owners – especially listed companies – I suspect correlations will rise.
Recently I’ve noticed the price direction of Bitcoin overnight can be a good indication for where the stock market will open the next day.
In other words, it seems to be more of a ‘risk-on’ asset than a safe haven. Speculative, even.
Many things drive asset prices, however. Disentangling it all is complicated.
Being subject to risk-on speculation shouldn’t rule out Bitcoin from serious consideration.
Consider the many gold rushes or even the dotcom bubble. Yet people still allocate to precious metals and stocks for the long-term.
Exposure to global GDP / assets
If or when Bitcoin becomes bigger and more integrated with the financial system, it may be harder to ignore if you want broad exposure to global economic trends.
This still doesn’t necessarily mean you need to own any bitcoin.
Listed companies like Tesla, Square, and MicroStrategy 2 already hold bitcoins. If more firms follow their lead and carry Bitcoin on their balance sheets or accept it as payment, your portfolio should gain exposure anyway.
Whether you like it or not!
FOMO
Fear of Missing Out (FOMO) may seem a flaky reason to own bitcoin.
But we are all human, and psychological factors loom large in investing.
Bitcoin’s rally confused me in 2017. I lost a few hundred quid buying late into that short-term bubble and then bailing, which at least saved me from losing more. But it got me reading.
Eventually I shifted from an agnostic position to become a weak believer.
That – added to the FOMO I felt in 2017, and knowing Bitcoin had been through several booms and busts before – meant I wanted some ahead of any future surge. Long story short, I accumulated my way to owning one bitcoin in early 2020 at what now seems a bargain price.
The good thing about buying something you’re not certain about is you have skin in the game. You pay more attention, and you panic less if the price rises. You do have to watch your total exposure to stay comfortable.
The worst thing would be if you’re keen on Bitcoin but prevaricate, then pile half your money in during a bubble before selling after the price pops.
Some people really do that sort of thing in times of wider madness.
Being realistic about your human frailties in advance and setting some guardrails can help protect you from extreme emotional investing.
#3 How much should you allocate to Bitcoin?
So how much bitcoin should you have in your portfolio?
Luckily there is a simple formula:
Number of times you've written HODL in the past 24 hours + percentage of times you put the word 'fiat' before the word 'money' in conversation x 2 if you ever say 'debasement' outside of the bedroom – your current allocation to bonds = % to allocate to Bitcoin
(If over 100% please seek help. Or a mortgage.)
Obviously I’m joking. There is no simple rule of thumb for Bitcoin like there is for shares and bonds. It’s far too young and controversial.
I’d say less is more. To match gold, for instance, there’s still room for a 1% position to grow into a 10% position – or to be trimmed en-route – while not doing too much damage if it bombs.
Now you might say if you expect an asset to go up tenfold it makes no sense to hold just 1%. I hear you. Just take into account the uncertainty.
The brainiacs at ARK Invest ran a Monte Carlo simulation and found:
Efficient Bitcoin allocations range from 2.55% (to minimize volatility) to 6.55% (if you’re focused on returns), ARK says.
Those numbers seem reasonable to me.
Obviously they stand to look ridiculous if Bitcoin goes up five-fold by 2025 or if you can buy three bitcoins for £10 by Christmas.
That’s the nature of investing in highly uncertain super-fast growth.
No pain, no gain
Do not underestimate the pain caused by volatility in your portfolio, even if you’re bullish.
If you’re a passive investor in broad index funds, you won’t be used to seeing truly outrageous overnight moves.
Morningstar also crunched the historical data on allocations and found:
Source: Morningstar
We can see from the table that even small allocations to Bitcoin made a big difference:
Bitcoin’s standard deviation was more than 15 times that of the equity market, making it among the most-volatile assets in Morningstar’s database of 35,000-plus market indices.
As a result, both risk and returns increased with larger bitcoin weightings.
Even a 1% weighting would have led to a sharp increase in standard deviation compared with an all-equity portfolio, as well as significantly worse drawdowns.
These numbers assume annual rebalancing. Monthly rebalancing would have led to better risk-adjusted returns, but are costly and a lot of hassle.
Conclusion and what I’m doing
Hopefully this is all food for thought for anyone wondering about holding bitcoin in a portfolio.
If you expected a pat answer – 10% in Bitcoin, say, or a year’s earnings – then sorry. Come back in 20 years and I’ll be more precise.
In retrospect I was extremely lucky with my own timing. When I bought my bitcoin it was very expensive compared to ten years ago, but still manageable versus my net worth.
The price has since skyrocketed. But as my thesis is that Bitcoin really does become more valuable as the price rises (as opposed to it just being a Greater Fool game) I can live with that.
I even added a small stake in a Bitcoin miner as a trading play in my ISA. (Not enough to make me millions, alas).
It helps that I’m an active investor in individual shares. I have a direct position in a gene editing company that exploits a biological hack derived from slime mold to modify human DNA.
An allocation to Bitcoin does not keep me up at night.
Passive investors face a more difficult conundrum. Bitcoin is definitely not an established asset class. That it’s making a lot of headlines and going up in price doesn’t mean you need to own it. Plenty of things do that everyday.
It’s fine to say you’ll let the market take care of it. If Bitcoin does become established, then banks, fund managers, and others will incorporate it into their operations. 3 You’d gradually get exposure to Bitcoin without doing anything.
This neatly sidesteps the questions about position sizing and volatility, let alone the risk of the technology failing or quantum computers someday cracking Bitcoin. 4 (Weighing up Bitcoin makes bonds look easy!)
If you do see merit in adding some bitcoin for diversification, I suggest starting small. You could even pound-cost average in each month, as you might with other assets.
Bitcoin may be new, but we can still apply a sensible investing framework to it.
Perhaps using debt to increase our position sizes if needed.[↩]
I enjoyed Ben Carlson’s response to the GameStop ferment this week.
He could have dived into the minutia of gamma squeezes and Reddit lore. But instead the Wealth of Common Sense blogger and Weekend Reading favourite dived into his archives.
Ben decided to reprint a chapter of his book Everything You Need To Know About Saving For Retirement. In it he explains how he helped his then-girlfriend (miraculously now his wife) to get familiar with market volatility with data like this:
It’s a golden oldie, and foundational to long-term investing.
Many people compare the stock market to a casino but in a casino the odds are stacked against you. The longer you play in a casino, the greater the odds you’ll walk away a loser because the house wins based on pure probability.
It’s just the opposite in the stock market. The longer your time horizon, historically, the better your odds are at seeing positive outcomes.
There’s something grounding about returning to old writing and classic wisdom when confronted with a new tumult, don’t you think?
They’re more like guidelines
Of course religions have been doing this sort of thing forever. Anyone who grew up within earshot of a holy book-quoting relative can attest to that.
And indeed it’s too complacent to get religious about investing.
The US stock market doesn’t have a preordained right to 10% returns a year over the long-term – let alone to spank the pants off other markets around the world for years. Equities in general aren’t totally guaranteed to deliver higher returns than bonds, say, even if you hold them for a generation or two.
But there’s many good reasons to think they should. Implicitly, whether we invest passively or actively, we put our faith in that, and other investing ‘truths’.
The point is to – just like a church go-er trying to weigh up contradicting passages and the strong suspicion they’ve sinned – achieve a balance.
Trust in shares for the long-term, but have some bonds and/or cash.
Don’t watch your portfolio every day if you’re a passive investor. But tune in once or twice a year to rebalance and check everything is on-track.
And so on.
Amen.
Forgive me father
Okay, so Ben is not a saint. He did also deliver his own hot take on the GameStop squeeze. Several hot takes in fact, including in his podcast.
Ah well, we’re all only human.
I wonder which version his wife got this time if she happened to ask about GameStop?
I also wonder where to find these eligible people who’ll marry someone who explains the stock market to them on a date. They elude me!
Financial regulators exist to stop anyone ever losing any money and to protect us from ourselves, right?
Many people seem to think so.
As the GameStop drama reached its zenith, a clamour went up.
“Where are the regulators? Something must be done!”
My view was closer to that of the president of the Minneapolis Federal Reserve:
“If one group of speculators wants to have a battle of wills with another group of speculators over an individual stock, God bless them… If they make money, fine. And if they lose money, that’s on them.”
Of course, seeing sophisticates like Chamath Palihapitiya, Mark Cuban, and Jordan Belfont (the real Wolf of Wall Street) cheering on retail punters – many of whom clearly had no exit plan – made me uneasy.
Those big guns can handle themselves. So too can the sophisticated sliver of Redditors who first proposed GameStop as a target.
But the masses from Robinhood were already looking at unsustainable profits by the time GameStop had all our attention.
Robinhood and other brokers restricting GameStop at the height of the frenzy – for operational reasons, such as capital requirements – probably did help burst the bubble.
But the price was always going to fall from the artificial levels achieved on the back of shorts caught off-guard.
Besides, if you want to play this game, you need to know things happen – from margin calls and getting stopped out to your platform bailing on you.
There’s a scene in The Big Short where one of the managers realizes the bank facilitating his wager against the US mortgage market could go bust.
His apocalyptic bet could be right – but the bank might not be around to pay up.
That’s the level of paranoia you need when markets are roiling on your trades.
Why regulators?
You might think I’ve just made the case for more intervention by regulators.
Self-proclaimed dumb 1 money pitted against professionals in fast markets with platforms taking away the ball mid-game…it’s hardly sober investing for your old age.
But remember why we can even have this discussion.
For decades, direct investing was for the rich. They knew the game and could afford to play.
Perhaps the purest manifestation were the wealthy Lloyds names who profited in the London insurance market for centuries – at the risk of unlimited personal liability.
But even with investing in shares, fees were horrendous, information unevenly distributed, and what we’d now call insider trading was rife.
Ordinary people could eventually pool their money into active funds. But returns were often poor, and the charges astronomical. (Think 5% upfront just to get a fund to take your money, and it didn’t get much better after that.)
Today is very different.
Information is abundant. Brokers like Freetrade charge nothing for trades. Anyone who passes an identity check can deal in all kinds of securities. Cheap index funds enable 99% of people to get the exposure they need.
Of course now that people have access to far more financial products and securities, there’s more scope for things to go wrong, too.
And some people still believe the markets are rigged against them, despite this democratization of finance.
Hence the Bat-signals regularly sent out to the regulators. With every mishap comes a call for more intervention to protect poor investors.
I say be you’re careful what you wish for.
Our hard won parity with richer or more sophisticated investors could be lost to overzealous regulation.
Banking crisis
Many Reddit traders said they wanted to take revenge on Wall Street. And Twitter is full of claims the market is ‘rigged’.
It’s all a great cover for overly nanny-ish regulators to dial back many of the freedoms these new traders prize.
Luckily, regulators seem to be more sensible so far.
A few politicians have made noises. But from what I’ve heard from the regulators, their focus is on ensuring the system holds up and remains well-capitalized.
Most especially they want to avoid a cascade, where one platform borks and its partners and counter-parties fall like dominoes.
Still, considering all the red tape introduced after 2008 – such as the Dodd-Frank Act in the US – we might ask why there still always this call for regulators?
One reason must be the lingering lack of faith that resulted from that crisis.
It’s hard to remember now just how revered bankers had become before the crash (they were seen as near-infallible) and how often we were told things were made more resilient by all the complex financial plumbing.
Despite (or perhaps, it was implied, even because of) so-called light-touch regulation.
Oops!
That claim didn’t age well.
Payment Protection racket
Many who say they want justice cite the lack of repercussions – especially jail time – for the bankers at the heart of the crash as their casus belli.
Countless more bankers walked away with big bonuses than went to jail.
But one big difference – in the UK – was the billions forced out of the banks as a result of the (mostly unrelated) Payment Protection Insurance scandal.
The total bill for PPI claims against mis-selling came to over £53bn.
A staggering sum. I personally think it was excessive.
No doubt many customers hadn’t bothered to read up on what the PPI they were paying for did.
But I don’t believe banks genuinely hoodwinked customers out of £53bn, or anything like it.
When I was looking to buy a flat in the early 2000s, almost every article I read about mortgages mentioned PPI – and told me I probably didn’t need it. If I was cajoled into getting a PPI-bolt-on, I would have gone elsewhere.
But many buyers just signed paperwork blindly. They didn’t do any homework.
Anyway, after the regulators ruled the banks had mis-sold PPI, early estimates of the provisions quickly snowballed.
Shady companies sprang up, cold-calling us into making a claim.
In the end people who had never heard of PPI were getting compensation for forgotten credit cards they’d been perfectly happy with at the time.
I know it’s hard to have sympathy for big banks who cynically tacked unneeded costs onto their dockets.
But if we don’t expect people to try to know what they’re buying when they borrow four-times their annual salaries or more, when should we?
It’s a very slippery slope.
Banned substance
Anyway, it feels to me like the PPI scandal infused the UK consumer of financial products with a compensation culture mindset.
Barely a week goes by now without something labelled ‘the next PPI’.
Indeed, avoiding ‘the next PPI’ has probably already helped restrict what products we have today.
The Order Book for Retail Bonds launched with great fanfare a decade ago as a way for ordinary investors to buy higher-yielding company bonds directly. It’s now moribund. Mostly that’s because cheaper funding became available elsewhere. But I suspect corporations also decided they could do without the hassle of retail investors.
Riskier mini bonds have effectively been regulated away. You might say good riddance after some blow-ups. But I enjoyed my mini bond portfolio – the higher interest mostly, but also exploring the asset class.
A host of factors killed off peer-to-peer investing as originally billed. I think regulation and fear of The Next PPI was in the mix. The big platforms Zopa and Ratesetter had their ups and downs, but overall they allowed enthusiastic users to earn higher interest rates for years. They’re just a shadow of their old selves. Even some readers of this website called them ‘the next PPI’.
Whenever a bank threatens to do something with its preference shares, campaigners cite poor pensioners subsisting in blissful ignorance on the dividends. Yet some of these people cried foul at restrictions on retail investors buying new kinds of hybrid bank debt. You live by the sword…
That list is hardly complete, incidentally.
Regulators don’t seem exactly enamored with Innovative Finance ISAs, for instance, which may be one reason they’ve been slow to take off.
And while you’re free to gamble away your life savings at the bookies or online, the checks and restrictions around sticking £50 into a crowdfunded start-up are more rigorous.
Recently the FCA banned the sale of crypto-derivatives, too.
Cry freedom
For sure people don’t require any of those to achieve their financial goals.
But I used some of them – and I certainly liked having the choice.
I don’t dispute a need for some regulation, of course. I can also see that regulators have a very difficult job.
Equity crowdfunding – to take one of my vices – is beset with inflated claims, inadequate markets, scant due diligence, illiquidity, and failure. That’s despite active regulation. You shudder to think of the losses if literally anyone was allowed to say and sell anything to anyone.
But there’s always a danger regulators will go too far. And the cries that go up whenever someone loses some money in some ill-fated venture these days makes it more likely.
For example, there was an episode I remember where it seemed like investment trusts might be accidentally regulated out of retail portfolios.
I even dimly recall a couple of decades ago that dealing in individual shares might have ended up restricted to professionals or other financially sophisticated persons.
Luckily nothing came of it. But don’t be complacent that you’ll always be able to invest in the future like you can currently.
Most people hanging around Monevator are fans of being put in control of their own pension money, obviously.
But we’ve already heard warnings that some people spend their pots too quickly, or that you should have to jump through more hoops to get access to your cash. And that’s in a mostly rising market. Imagine how a big bear market could underwrite that case.
Maybe if you’re forced to convert your index trackers into a derisory annuity when you retire, you’ll sympathize with those of us who don’t like being told we can’t do something because someone else was stupid.
The only way is up
Perhaps the craziest compensation call I’ve heard was that investors in Neil Woodford’s funds should be compensated for the gains they would have made if they’d invested in other, higher-returning products.
The giant can of worms such a precedent would set hardly needs explaining. Yet a few otherwise sensible people nodded along in agreement.
Besides the impracticality and unintended consequences of such a move, it would also cement the growing sense that investing should, apparently, only involve rewards and no risk.
What could you invest in if such a view won the day?
An FSCS protected bank account paying less than 1%, and that’s your lot.
Self-preservation
Regulators do an important job. We don’t want lawless markets.
Regulation around stuff that really kills people – such as debt – is especially important.
I’m pleased regulators will soon regulate ‘Buy Now Pay Later’ firms, too.
But if you’re someone who calls for regulators to swoop down whenever trading gets frothy, on the grounds that people could lose money, please think again.
It took a long time to win the financial independence and options that we enjoy today.
We don’t want our financial lives shepherded back into the hands of advisors, simply due to excessive regulation.
It’s a golden oldie, and foundational to long-term investing.