Best products from r/EuropeFIRE

You're still being quite general, but I'll answer the best I can.

To be honest, as a trader I mainly traded OTC (Over-The-Counter) interest rate products that are not available to trade for retail investors, so you learn most of it on the job, other than pricing and valuing the products themselves, which appears on textbooks, but nothing that can be of much use for a retail investor.

Each financial product is different, so although there are some "transferable" skills, it truly depends on what you are trading, but again, trading is very short-termist so I wouldn't recommend it to a retail investor in spite of all those guru books that sell you that you can be a successful day trader, you can't: you'll just bleed losses, bid-ask spreads, brokerage fees and short-term taxes, plus again there is no way you'll beat full-time pros.

In terms of learning Economics and Finance, I'm afraid I'm of little help because I learned it all during my degree and masters at a very in-depth, specialised level, purely through textbooks. Also, a lot of it is very theoretical and not sure if of much use for an amateur level, or for real life, for that matter.

I did watch quite recently a video by billionaire hedge fund manager Ray Dalio, which explains quite well and succintly how the economy works. For those readers that don't speak English very well, if you go into Bridgewater's youtube account, you can find the video in different languages.

If what you refer to is equity investing, but not anything related to the Efficient Market Hypothesis (EMH), I quite sympathise with the value investing approach. In that sense, books I'd recommend are:

• The Snowball by Alice Schroder
  
  
• The Intelligent Investor by Benjamin Graham
  
  
• Security Analysis by Benjamin Graham and David L. Dodd
  
  
• The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor by Howard Marks
  
  Oh, and you'll have to learn public company accounting and valuation inside out, as well as get used to reading annual and quarterly company accounts (amongst other things) on a regular basis.
  
  The info sidebar of /r/SecurityAnalysis is probably a good starting point.
  
  Anyhow, the real and only way to learn about investing is to get down to it and put some money on the line. Books will only get you so far.

The most complete overview I've read of the shortcomings of the Permanent Portfolio are outlined in Bernstein's Deep Risk. I'd recommend you read that. The whole "Investing for Adults" series is really instructive. Specially for people tinkering with non-conventional portfolios.

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the book distinguishes between deep (loosing your money even in long periods of time) and shallow risks (loosing your money in shorter time frames). the book shows that the PP is not a great Portfolio at preventing Deep risk.

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Some of the shortcomings of the PP are:

• It tries to mitigate risks of inflation, deflation, confiscation and devastation by deploying equal resources to each. the issue is that all the scenarios don't have the same likelihood, and don't have the same costs in terms of insurance.
  
• historically international diversification did better against inflation than gold (from a deep risk perspective).
  
• historically international diversification did better against deflation than gold
  
• you can only reasonably protect against confiscation through holding gold bullion or owning real estate. but that is super costly. confiscation is also super unlikely in most of the developed world.
  
• devastation requires the same approach as confiscation. which is costly and unlikely
  
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  Do note that the original idea of the PP as presented by Harry Browne was to use gold bullion coins. Not ETFs.
  
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  Also do note that I just took a quick glance at my Kindle for these shortcomings. The best way to get informed by this is to actually read the book and draw your own conclusions.
  
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  Like /u/Dissentient I don't believe in the magical Portfolio which survives every possible risk, so my views on this are biased.

In the current market bonds are mostly a way to dampen volatility of your portfolio. That is a bit how Markets work though... some times certain pieces of a balanced portfolio underperform or overperform.

Anyway, some very smart people argue that in the current market it's better to just use CDs as the 'fixed income' part of your portfolio for various reasons, so there's a good chance my own strategy isn't the absolute best.

I would argue it's still wise for anyone to have some diversification in their portfolio as a way to reduce volatility, but maybe that's just because I realize I'm not a a perfectly rational person.

I recently read this article with some interesting insights into asset allocation and how it affects portfolio performance and volatility and would recommend at least considering its message. A small allocation (let's say 10-20%) in 'fixed income assets' isn't likely to be a very big drag on your performance but can reduce volatility significantly if rebalanced every now and then.

Portfolios with 100% equities are pointlessy risky: allocatin a little to bonds reduces risk with no significant effect on geometric returns.

Page 81.-82.