"Bill Noble" wrote in message
...
On 8/11/2011 6:28 AM, Ed Huntress wrote:
wrote in message
...
On Aug 11, 12:11 am, "Ed wrote:

Mutual fund managers believe there is also a risk of not being
invested. That is the risk Social Security is now taking. It is not
invested and it is not providing any return. A diversified investment
is safer than one that is not diversified.

Dan

Do these mutual fund managers say what they think SS fund should be
invested
in"

--
Ed Huntress


I said that they believe there is a risk in not being invested. I did
not say they had any opinions about Social Security.

Dan

So, if that is the risk Social Security is now taking, what would be the
safer alternative? What should it be invested in?


aaah, the point is that low risk carries an opportunity cost, the income
you fail to earn when the higher risk alternatives go up in value. lowest
risk usually (but not always) equates to lowest return. the "not always"
part comes into play when one of the risks that causes the higher risk
alternatives to be higher risk, materializes.

I don't htink that's how Dan is using the term, Bill. He's brought this up
before. What he's calling the "risk" of not being invested actually is the
result of a *lack* of risk. In fact, given normal markets and over the long
term, it's a near-certainty that an escrow account, or a defined-payment
plan backed by government securities, will not "perform" as well as a good
investment plan.

It's not designed to "perform." It's designed to nearly eliminate risk. And
Dan's calling that the "risk." It's a misuse of the meaning of risk, and
possibly an attempt to produce a paradoxical meaning for something that
actually means the opposite.

In other words, it's double-speak.

--
Ed Huntress


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www.wbnoble.com