However I have seen surprisingly little engagement from the EA community on this particular topic, possibly due to the only recent publication of Trammell’s 80,000 Hours podcast, his patient philanthropy paper, and the two blog posts by Dickens and Hoeijmakers I reference above. None of those sources directly reference the question of optimizing high-yielding investments
The post mainly talks about using leverage, but I do talk about specific investment choices in this section. See also this followup post.
Right now, a large percent of EA money is in Facebook stock (at least according to Forbes). Holding money in a single stock has about 2x the risk of the S&P 500 and ~4x the risk of the global market portfolio, but without any additional expected return. Diversifying this money seems to me to be the most important improvement to the EA investment portfolio, although I don’t know how tractable it is. I don’t have any personal connections to Cari Tuna or Dustin Moskovitz, so I can’t speak to their reasons for continuing to hold most of their net worth in Facebook stock. Based on a quick back-of-the-envelope calculation, moving their money from Facebook to the global market portfolio would be worth an expected >$1 billion per year.
In the long run, you cannot earn greater than market returns, because eventually you will have so much money that you’ll run out of above-market investing opportunities (and that’s assuming you can identify above-market opportunities in the first place). So it’s not obvious that changing investment returns affects whether to give now or later unless you’re only talking about the next few decades. I do think it’s plausible that the best time to give could be a few decades from now, plus it’s still good to earn as high an investment return as possible even if you still believe you should spend your budget relatively quickly.
I did previously write about optimizing investments: https://forum.effectivealtruism.org/posts/g4oGNGwAoDwyMAJSB/how-much-leverage-should-altruists-use
The post mainly talks about using leverage, but I do talk about specific investment choices in this section. See also this followup post.
Right now, a large percent of EA money is in Facebook stock (at least according to Forbes). Holding money in a single stock has about 2x the risk of the S&P 500 and ~4x the risk of the global market portfolio, but without any additional expected return. Diversifying this money seems to me to be the most important improvement to the EA investment portfolio, although I don’t know how tractable it is. I don’t have any personal connections to Cari Tuna or Dustin Moskovitz, so I can’t speak to their reasons for continuing to hold most of their net worth in Facebook stock. Based on a quick back-of-the-envelope calculation, moving their money from Facebook to the global market portfolio would be worth an expected >$1 billion per year.
In the long run, you cannot earn greater than market returns, because eventually you will have so much money that you’ll run out of above-market investing opportunities (and that’s assuming you can identify above-market opportunities in the first place). So it’s not obvious that changing investment returns affects whether to give now or later unless you’re only talking about the next few decades. I do think it’s plausible that the best time to give could be a few decades from now, plus it’s still good to earn as high an investment return as possible even if you still believe you should spend your budget relatively quickly.