Rebalance into what?
Discussion
Doesnt matter, no second best. Rebalance = Sell the winner to buy the loser.
There is no point to money of you never intend to spend it... If you have no property, buying some is a lower time preference decision than continuing to rent something forever. Allowing you and your future kin to stack more in the future.
Yes that i dont disagree with. But buying a property to live in isn't the same as buying up properties as investment. A rebalance implies putting it into a different investment vehicle to gain future wealth
There is no second best. Buy corn, practice low time preference and use corn to buy things that meaningfully improve your life and will last generations.
A lot of stuff. You ever heard of large holders buying real estate when their wealth increases.... Yea that's one example. It's kind of the point. Use savings to quite a more secure future. Some rebalances are better than others but value is subjective and everyone has their reasons. Lambo for instance would be a bad low time preference trade but more often than not, hodlra display lower time preference in their decisions. If they don't well... Bitcoin makes its way to people that would more likely display a low time preference. The incentives work.
If you're buying something to utilize, you'll depreciate that asset. It's not an investment that's a purchase. A sale of your currency, bitcoin. An investment is with the opposite intent. Two distinct economic implications.
Buying a home that you will utilize one, will not depreciate (although it's very leaky, there is property tax and maintenance cost) and two is an investment in your future. Investment is about getting more money. It's about a future return on that investment. Most of the time that means more money, but not always. Some things return your time for instance. Like a riding mower.... It will depreciate, sure but it is an investment. It will save you more in time than it cost you in past monetary units.
good point.. there's nothing to rebalance into! I guess some folks might rebalance into fiat- lowers the return but also lowers the volatility. put some stables into a defi pool and get 10% apy out of it.
Do not put stables into a defi pool. That's extremely risky for only 2% more interest than S&P500 average return... Buy things you need. Practice low time preference. If you don't have a home, put a down payment on one.
isn't a defi stables pool a lot safer than sp500?
Lol no. Definitely not.
Care to explain?
Stables are centralized shitcoins on top of centralized pools, on top of centralized fiat. There is loads of counter party risk and none of its regulated. Now I don't like regulation just as much as the next guy but if they are offering higher returns than fed fund rate they are rehypothicating your deposit with more loans. More risk. You know what happens when it blows up? You lose it all. Ask the people that deposited in anchor protocol. It's a ticking time bomb. I'd rather invest in top 500 businesses in a very well regulated market. 8% return on average. Shit if you just want to keep dollars a mutual fund is where you go. Chasing more yield is going to end badly one day for you.