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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