I don't think I need to tell Ray his is wrong... and his posts below confirm that further. He knows very well exactly how the spreadsheet would need to run to account for the voatility risks, and he's saying he refuses to do so.Actually, I have no idea what you are talking about, and no idea of how you think the spreadsheet should be modified.And you persist in equating volatility to risk. It isn't. You aren't alone in this, though.The stated reason is he's standing firm he doesn't believe the risks matter.Oh, risks matter all right. Matters a lot. But intermediate volatility is not risk. It's just the path that the path that the portfolio value meanders on in the journey from start to finish. If you Rip Van Winkle'd right after starting the account and woke up 40 years later, you wouldn't care about the intermediate values, you'd only care about the final value.The unstated reason is doing so would have the naked (unhedged long) positions lose.In this, you are wrong.You *DO*, however, understand the issue... and its disappointing you won't simply show a run with both carrying equal risk of principal loss from a forced liquidation during a market drawdown.I have NO idea what you are talking about."S&P: 50/50 asset allocation, monthly rebalance"Unsure what you mean by asset allocation, you've only named one market.Are you saying 50% to S&P, 50% to cash?Hmmm. This is not looking good for you, Dave. This reminds me of the time I took my first golf lesson, and asked the pro in all innocence, "What's a birdie?" The fact that I even asked the question revealed that I didn't even know this very basic thing about the subject.Yes, that's standard terminology in investing. I assumed that anybody engaged in or following this thread would know the jargon--it's pretty basic.XX/YY asset allocation means XX% stocks and YY% bonds, and XX+YY must equal 100%. It _generally_ also (weakly) implies periodic rebalancing when the ratio drifts away from XX/YY as the positions grow at different rates.So, anyway, the way the investing field addresses volatility is to have less stocks and more bonds (actually "fixed-income", but it's accepted that this means bonds). This is "asset allocation". The "bond" could be cash, but the accepted lowest-risk vehicle is US government T-Bills.It seems that you are unfamiliar with the idea of asset allocation, because you talk about a "reserve fund". But that's just a nonstandard way to name the fixed-income piece of the XX/YY allocation. Don't expect the investment community to drop their terminology for yours. It's "XX/YY asset allocation", not "reserve fund".Now, the accepted very-safe allocation is 60/40. 50/50 is infrequent but not unheard of. 53/47 is valid but nobody ever talks about such a ratio, they'd use 50/50.I believe that the results I reported in the post you dismissed as "stream of thought" is *exactly* what you're talking about w/r/t a "reserve fund". The "sub-account" alternative gets one-half of all the deposits. Nobody knowledgeable would do it, though, because it's been proven time and time again that periodic rebalancing is superior.you're the one carrying the mail & doing the heavy Excel lifting. I'm only proficient enough to take forever building it out, ...But it's not neccessary to be proficient in Excel to use my spreadsheet. All you need to do is enter your desired parameters in the blue cells... its disappointing you won't simply show a run with both carrying equal risk of principal loss from a forced liquidation during a market drawdown.I have no idea what you are asking for. (Or did I say that already?)I'm curious about that phrase "forced liquidation". The scenarios that have been mentioned, "buy out law partner at pennies on the dollar", "pay for a daughter's life-saving operation", "take advantage of a lucrative opportunity" are not forced at all. They are voluntary -- you *choose* to take the money out of your retirement account for non-retirement reasons. The only "forced" liquidation you'd face is if the broker hit you with a margin call and sold you out. But that won't happen here, because we won't use margin here.Nonetheless, perhaps what you mean is "really really strong reason". So you are positing a rare case of strongly wanting to withdraw money and the infrequent case of a large market drop. The comination of two low-probability things is an even LOWER probability of them happening jointly. This is silly.With a Fixed Reset Indexing strategy (like an IUL) ...Look, I've been down this rosy path before, so I recognise it. And I'm not buying it.We had a consultant once who helped us write a product spec to be put out to bid. When it was all done, it had requirements that were worded such that only their own product met the requirements. So when you have a requirement like "Fixed Reset Indexing" (with capitalization no less) that only an IUL meets, what you are requiring is a tautology. "Give me a product which is an IUL". Not buying it.
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