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Forward Guidance

The Romantic Backlash to Boring Robot Investing

What’s behind the enduring appeal of prime bank scams?


At a high enough level, predicting the future of investing is easy. The future of investing is that people will spend less time and money on it and that it will work more efficiently and predictably. This is also the future of driving and the present of, like, dishwashing. The ideal future of most boring, stressful, specialized, and necessary activities is that someone will build a machine to do it for you so you don’t have to think about it anymore.

It’s also fairly straightforward to describe exactly what this means. Mainly it means low-cost broadly diversified index funds: Why spend a lot of time picking stocks, or a lot of time and money hiring people to pick stocks for you, when you can just get the deepest wisdom of modern academic finance practically (or literally) for free? Or if that is not quite your thing, then you can get low-cost, factor-based quantitative funds that might outperform the index but that will also, probably, be cheap and efficient and predictable and backed by the latest research in academic finance. Also there will be an app on your phone that lets you manage this and that saves the right amount of money for you out of your paycheck, etc.