Thanks for sharing!

I don't have the necessary expertise to evaluate the portfolios, but I would be curious to know what you usually recommend to the people you advise. Is it closer to all-stocks, 3-fund, or something else? Or is it highly dependent on the specific individual financial situation?

From 1973 to 2013, a portfolio like this returned

Anytime someone picks a seemingly pointless and random date range like that they are biasing the results.

Just want to quickly note that that article was written in 2015, so looking at 1973-2013 doesn't seem that random.

There gets to be a point when the marginal gain for a different asset mix isn't worth the extra hassle and cost of rebalancing.

I definitely agree with this, but I'm skeptical that 100% US equities is already at the point where adding some diversification is too costly.
 

If you're selling to rebalance in a taxable account, then the capital gains tax is going to eat away at your investment gains.

If I understand correctly, donating stocks can be a way to partially offset this that might be useful to keep in mind for EA investors.

That said, I'm really not knowledgeable in this, and it seems plausible that the best way to diversify doesn't include bonds

I'm surprised to read this. Interactive Brokers (as an example) is available in many countries, has low fees, and there are many similar country-specific services. Can't people just buy VWCE/VWRP/IWDA?

All my friends in Europe and UAE don't seem to find it hard to invest

Thank you for sharing this.

What do you think of this old article from 80,000 hours that argues against investing everything in US equities?

Especially after the recent market volatility, I'm wondering if it makes sense to recommend people invest part of their wealth in bonds and commodities

From the article above:

Many people I’ve spoken to are almost fully invested in US equities. I think the rationale for this is that equities have been the best returning asset historically, so there’s no reason to own anything else. Another rationale is that since you can’t beat the market, you should put everything into equities.

But US stocks do not equal “the market”. If you try to tally up all global financial assets, you get something like this:

• 18% US stocks
• 13% Foreign developed stocks
• 5% Foreign emerging stocks
• 20% Global corporate bonds
• 14% 30 year bonds
• 14% 10 year foreign bonds
• 2% TIPs
• 5% REITs
• 5% commodities
• 5% gold

This represents the truly agnostic portfolio. If you think you have no ability the beat the market, then this is the portfolio with the best risk-return. 100% US equities is a huge bet on just one asset.

From 1973 to 2013, a portfolio like this returned 9.9% per year. In comparison, stocks returned 10.2%. So you only gave up a tiny 0.3% to switch to this portfolio.

In return, you had far lower risk. The volatility of the 100% equity portfolio was 15.6%, whereas this diversified portfolio had a volatility of only 8%. The maximum drawdown was also only -27% compared to -51% with equities. The wide diversification also makes you less vulnerable to unforeseen tail risks.

The much lower volatility means you could have levered up 2x and ended up with the same amount of volatility and same drawdowns as equities, but returns that were twice as high, at 20% per year.

(It also had slightly higher returns than a 60/40 equity/bond portfolio (9.9% vs. 9.6%) but with volatility of 8% rather 10.5%. The returns and risk are also similar to the risk parity portfolio Ray Dalio recently recommended to Tony Robbins. And if you lever 1.4x, you get something that historically looks very similar to the true Bridgewater ‘All Weather’ portfolio).

(Source: Meb Faber’s book “Global Asset Allocation”)

Going forward can we expect a similar result? If US equities do unusually well compared to other assets, then the diversified portfolio is going to perform worse than 100% equities (as has happened in the last few years). But due to the far greater diversification, and so long as you have no strong reason to believe you can pick which assets will outperform, we should expect the global market portfolio to deliver the best ratio of risk to return. [...]

I think many people can/should apply, but of course I expect only few will get in.

I also don't know if "paid internship" is a good description, I think it's probably closer to Ambitious Impact programs than to a typical internship (the "founding to give" program is made in collaboration with AIM)

I think for most people applying to their fellowships would be the best way to collaborate with SMA to do good (as he mentions in the video)

There's also this article from Giving What We Can with some examples^[1], which claims

Our research team believes that many of us can easily 100x our impact by giving to charities that achieve more per dollar spent.

Personally, having looked at some average charities, I think both articles downplay the difference in practice

Some quick reasons why I think so:

1. If I remember correctly, the 80k article compares the mean of the top 2.5% interventions with the mean of all interventions. This artificially caps the maximum possible difference at 50x. I think that GiveWell-recommended charities are in the top ~0.1% of charities, and so can have a much higher relative difference.
2. Training a guide dog costs at least €25,000^[2] in Italy, and it's not clear how much of it funges with public funds for the same program. A guide dog typically works for 6-8 years, so with €3.5k you can maybe cause a blind person to have a guide dog for one extra year. If you compare it to what the same donation to a GiveWell top charity achieves with the same amount, the difference is (at least to me) clearly much more than 10x. You could argue that these are different "cause areas", but to me they are both "human health and wellbeing"
3. Personal anecdote: my parents are going to a concert for charity next week, and invited a friend of theirs. We looked up what the funds are going to, and it turns out they are raising €40,000 to purchase "two devices useful for preventing alopecia induced by chemotherapy". Their friend is bald and was disappointed after knowing that, but none of them would have checked, and I imagine they would have assumed to be funding something within an order of magnitude of cost-effectiveness as any other donation to charity.
   I think this is representative of what the "average charity" in a wealthy country looks like, and I'm confident that an extra €40,000 to Remote Health Centers In Uganda would buy something that's significantly more than 10x as useful as those alopecia-prevention devices.
4. According to Forbes, the biggest charity by revenue in the US is Feeding America at $5B/year. 6 of the top 10 also serve domestic needs. There are many reasons to believe that your dollar goes much further overseas. Taimaka claims that its average cost per malnutrition treatment is $100 per child. There is a lot of evidence to think that a marginal donation to Taimaka is much more than 10x more cost-effective than a marginal donation Feeding America for preventing hunger.

1. ^{^}

   I write software at GWWC, but I didn't contribute to this article in any way

2. ^{^}

   About $28,000. For the rest of the comment you can approximate €1 ~ $1

This is "do I have to believe it?" rather than "does this evidence suggest it?" thinking. They are simply not being forthright about the deep extent of the relationship between Anthropic and EA this whole time.

This whole thing is about two quotes with 44 words in total, which really don't seem to me to be false or misleading. Based on the little information I have, in the context of the article, I think they make the representation of the relationship closer to what I think is true, and consistent with previous messaging from them.

Of course I could be wrong and Askell and Amodei could secretly mostly have EA friends, go to EA parties, secretly self-identify with the community, etc. but I don't think there's public evidence to suggest that.

you have a history of apologetics for Anthropic, Lorenzo.

I'm very surprised by this and by the many strong votes and agree votes, I don't know much about Anthropic and I don't write much about Anthropic. Is it possible that you're confusing me with someone else? You can see all my EA Forum comments and tweets mentioning "Anthropic" here and here.