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kbog comments on EA Funds - An update from CEA - Effective Altruism Forum

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Comment author: Ben_Todd 08 August 2018 06:04:37AM 4 points [-]

I agree that would be ideal, but it doesn't seem like a high priority feature. The risk-free 1yr interest rate is about 2% at the minute (in treasuries), so even if the money is delayed for a whole year, we're only talking about a gain of 2%, and probably more like 1% after transaction costs.

You could invest in the stock market instead, but the expected return is still probably only 1-5% per year (as I argue here: https://80000hours.org/2015/10/common-investing-mistakes-in-the-effective-altruism-community/). Plus, then you have a major risk of losing lots of the money, which will probably be pretty hard to explain to many of the users, the press etc.

I expect the staff time spent adding and managing this feature could yield much more than a couple of percent growth to the impact of the funds in many other ways (e.g. the features Marek lists above).

Comment author: kbog  (EA Profile) 08 August 2018 05:08:20PM *  1 point [-]

The S&P500 has returned an average of >9% per year for the last 90 years.

How can you say "past returns are no guarantee of future returns" in response to this fact, then turn around and estimate future returns based on a snapshot of what yield and buyback are "right now"? The latter is much less reliable.

It takes about a minute to put money into a fund and another minute to sell it. Seems pretty simple to me.

Comment author: Robert_Wiblin 08 August 2018 09:29:35PM 10 points [-]

The effort required to set up a non-profit trading account, go through KYC, make it secure, teach everyone in the org how it works, and do the necessary legal, budgetary and accounting compliance each year make this much more than a few minute job. Things that are easy for individuals are often less straightforward for organisations.