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Subject:  Re: Strategy comparison S&P500 vs. IUL Date:  4/3/2013  7:34 PM
Author:  Dwdonhoff Number:  71686 of 80268

If you are "long" your home, and you buy homeowners insurance, you are placing a hedge.
Whaaat???? This makes no sense.

A Beginner's Guide To Hedging
The best way to understand hedging is to think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event.

Yep... Investopedia... that's a pretty obscure & oddball reference source ;~)

How did a house and homeowners insurance get dragged into this thread, anyway. We are talking about investments, not homes.
A retirement account is a 'financial home' equivalent. It is relied upon by most folks, usually without alternative options, for their survival.

Dave, you keep using loaded words & phraseology. You keep calling a long position "naked". No normal investors term it that way.
I guess it depends on your idea of "normal." I learned market finance from professional traders where risk management is everything, and undercapitalized drawdowns kill more accounts than anything else. Not saying that's superior, or normal... but that's the world I know.

A long is a long. The only customary use of "naked" in investment parlance is a "naked short" position. And a naked short is pretty well known to be a high-risk posi