The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: Hi gang... wow!!!||Date: 9/19/2013 1:48 PM|
|Author: aj485||Number: 73089 of 78166|
This is TMF, where we voluntarily show up & contribute to each other without charge, remember?
Right, and Ray started the spreadsheet, and it shows what he thinks is a reasonable comparison between the IUL and a few different naked strategies, so that people can choose which one fits their own personal risk profile the best.
If you want to espouse a different viewpoint than Ray has portrayed, you are free to take his spreadsheet and contribute your views to it. I guess maybe you think it's reasonable for you to ask Ray to spend his freely given time to make the changes to show your viewpoint. If that's the case, I don't understand why you portray it as 'obstreporous' or 'face-saving' for Ray to say no, when he is voluntarily giving his time to you.
As I explained to SykeSix, since we are not the Fed we can't simply manufacture currency out of thin air... if we have $1M total, we cannot simply conjure up an additional $500,000 to support the risks of $1M in the S&P500.
I know - my point is - if your invested account principal grows fast enough (like it will in the later years) that even putting your total new investable/reservable dollars into the reserves won't bring the reserve account up to 50% of the invested accounts, how do you get the reserves up to 50%? Sell invested assets? That seems silly, since the invested assets may have suffered a drawdown (small or large), and the reason for having the reserves is to not have to sell invested assets during a drawdown. So, I'm still not understanding how you expect this to be accomplished. After all, as you said - we can't manufacture money.
However, if we *DID*... then our total capital would be $1.5M, right?
Our $1M at risk would be 2/3 of our total capital. 1/3 covering the risk.
1/3 is 50% of 2/3... see?
Right - 1/3 is 50% of 2/3, so reserves are 50% of the invested account value. You keep referring to a 50% drawdown that needs to be reserved for, so I was using the 50% term