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Author: solasis Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 297  
Subject: Re: Is Risk the same as Volatility? Date: 3/14/2000 2:20 PM
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i disagree. you are not exposed to gambler's ruin with a s&p index fund. in and of itself, that is a diversified investment approach. you are exposed to potential long term price volatility, as there are two instances in the 20th century where the s&p lost 75% of it's benchmark value in real (inflation adjusted) dollars, with total losses in the range of 45-65% with reinvested dividends.

a s&p index fund, bought on margin to regulation t (50% equity), with a 25% equity maintenance level, exposes you to a margin call for a 25% pullback in the index.

tr
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