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Investing/Strategies / Retirement Investing
|Subject: Re: Strategy comparison S&P500 vs. IUL||Date: 4/3/2013 1:29 AM|
|Author: Rayvt||Number: 71678 of 80990|
OK, let's take this perspective then;
$100,000 liquid net worth.
How much of it would *you* (RayVT) put into an unhedged-long buy & hold position on the S&P, with the backward-looking wisdom & awareness of typical S&P drawdowns, versus "life happens" potentiality of needing to raid it for junior's uninsured skateboarding incident?
First of all, "incident" thing is why you have insurance (homeowner's and health). But still, a valid question if you substitute "unexpected expense" for that bit.
Oh, my! So many points to respond to. Here goes ... ;-)
1) "unhedged-long" -- Implies that there is such a thing as a hedged long position. There isn't. A "hedged long" position is effectively just a smaller position. Which by definition is unhedged, that is, an unhedged smaller position. (Which, BTW, is why covered calls are a stupid strategy -- they hedge away all but a teeny bit of the profit.) This phraseology is just fear-mongering.
2) "buy & hold" -- I don't do buy & hold. Of *anything*. Every investment strategy I use is subject to some form of a market-timing overlay/gate for shifting my equity allocation to short-term or intermediate term bonds/T-bills. It's not perfect, and it's not ultra-technical, or genius-level, or requires a massive or superhuman effort as CC likes to taunt. It just moves