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URL:  http://boards.fool.com/if-i-understand-daves-explanation-correctly-13-30878122.aspx

Subject:  Re: Hi gang... wow!!! Date:  9/19/2013  3:22 PM
Author:  aj485 Number:  73101 of 75793

If I understand Dave's explanation correctly, 1/3 of the S&P gains would go into the "guarding against the 50% drop" bucket.

How? By selling the assets?

If not, then they won't be 'liquid reserves' during a drawdown, because the value they lose during that drawdown won't be available for withdrawal. If so, then you run into the issue of potentially selling invested assets during a drawdown (even a small one) - which is specifically what the reserves are supposed to protect against. So, it seems like implementing this strategy could work against the goal that the strategy is supposed be accomplishing.

AJ
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