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MarekDuda comments on How to improve EA Funds - Effective Altruism Forum

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Comment author: MarekDuda 04 April 2018 06:42:02PM 20 points [-]

Hello, speaking in my capacity as the person responsible for EA Funds at CEA:

Many of the things Henry points out seem valid, and we are working on addressing these and improving the Funds in a number ways. We are building a Funds ‘dashboard’ to show balances in near real time, looking into the best ways of not holding the balances in cash, and thinking about other ways to get more value out of the platform.

We expect to publish a post with more detail on our approach in the next couple of weeks. Feel free to reach out to me personally if you wish to discuss or provide input on the process.

Comment author: Henry_Stanley 04 April 2018 09:47:41PM 2 points [-]

Awesome. Looking forward to seeing where EA Funds ends up!

Comment author: Brendon_Wong 11 July 2018 12:16:46AM *  1 point [-]

If EA Funds wants an effortless "zero risk" option to hold the cash, putting all of the money in a high yield business saving account looks like the way to go. This would probably only take several hours to set up.

According to various online reviews "Community Bank of Pleasant Hill Business Premier Money Management Account" seems the best, and "Goldwater Bank Savings Plus Personal & Business Account" looks good as well. Free withdrawals seem to be limited to twice a month but the withdrawal fee is pretty negligible relative to learning $20,000 in annual interest.

To increase yield, using CDs is an easy next step. Otherwise, opening a brokerage account and putting the capital into a money market fund or a short term bond fund would be a relatively low risk and higher yielding option.

Comment author: John_Maxwell_IV 05 April 2018 11:25:45PM 1 point [-]

looking into the best ways of not holding the balances in cash

A possible approach to this problem is to have a mixture of liquid and illiquid assets. Suppose an EA fund has $500K, with $100K in very liquid assets, $200K in moderately liquid assets, and $200K in fairly illiquid assets. Suppose the fund manager decides they want to give all $500K in the fund to a specific organization. In that case, they could give $100K to the organization immediately, which would hopefully tide them over until the $200K in moderately liquid assets became available, which would hopefully tide them over until the remaining $200K became available.

Comment author: MichaelDickens  (EA Profile) 19 April 2018 02:18:37AM 0 points [-]

Almost all typical assets--bonds, stocks, commodities--are highly liquid, in the sense that if you decide to sell them, you can convert them into cash in a few minutes max. So even a well diversified portfolio can still be liquid. The main exceptions are real estate and private equity, but I see no reason why EA Funds need to hold those.