1

We've had a few questions like this one lately, which are along the lines of:

Assuming I know [some fact] will happen, how could I make money off that knowledge?

While they sound like they have some value, if you assume their premise, they're really not of any actual value - you never actually know that thing will happen (or, if you did, the rest of the market knows that also). The answer is always "invest in something that correlates to the [fact]", but with a paragraph or two first of "don't try to time the market".

Can we either just close these (as asking for opinion? or as duplicates of one of the various similar questions?), or perhaps consider encouraging the OP to instead alter the question, if they really want to know what investment correlates to a particular [fact], to that: so the question above for example would be reworded from:

Assuming I know interest rates will rise, how can I make money off of that?

to

What investments are well correlated to interest rates?

Or something similar. That's a pretty broad question, but answerable, and ultimately of more utility without all of the market timing caveats.

2

It depends on the question, but in general, I think that there is value in these types of questions.

In the example question that you are talking about, the OP was curious about what types of investments would profit when interest rates go up. He didn’t want the question to get bogged down with a bunch of “You don’t know that interest rates will go up” comments, so he simply said, “assume I know for certain.” Of course, he doesn’t know for certain, but he wanted to scope the question.

The question has already received two good, relevant, interesting answers, both of which offer disclaimers that the assumption for this thought experiment is not necessarily valid in reality.

Theoretical questions are valuable, because they help us understand things. Yes, the question could have been worded a different way, to “What investments are correlated to interest rates?”, as you suggest. But I think it is equally on-topic no matter which way you phrase the question, and the questions really are equivalent.

I wouldn’t close this as “primarily opinion-based,” either. It is certainly possible to write well-defended answers, as two people have already done.

  • 1
    I think theoretical questions can have value, but I'm not sure they do in the StackExchange model. One of the typical tips for good questions in a Stack site is that question should be "practical", and "reflect a problem you face". This is in our help center as well - You should only ask practical, answerable questions based on actual problems that you face (help center). Theoretical questions are better for discussion forums, rather than single-answer sites like this. – Joe Mar 2 '18 at 15:53
  • Further, though, I think that modifying the questions to take out the part that makes them entirely theoretical still makes for a good question, doesn't it? And I think I don't agree with you that the question I linked really generated that good of answers: it would've generated much better written answers if they didn't need the comments about market timing, and perhaps would've had more focus. Many readers are probably not even going to get to the part of the first answer that is actually relevant: that's way too much text first to get through for most readers. – Joe Mar 2 '18 at 15:55
  • @Joe I respectfully disagree. I think theoretical questions work well in the stack exchange format, and voting puts the best answers at the top as well as weeds out the questions that are poor. Certainly some questions are better than others, but in my opinion a blanket ban on these types of questions is uncalled for. See also: Is it required for a question to apply personally to the asker...? – Ben Miller Mar 2 '18 at 16:05

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