wrote in message
...
On Jul 15, 6:59 pm, "Ed Huntress" wrote:

I could not figure out what you were referring to when you said "
Right. What you described is not risk. It's pretty much guaranteed."

Dan

I mean this: There is very little downside risk in Social Security, as there
is very little downside risk in, say, Treasury bonds. But. in contrast, all
private investments have downside risk. There are no guarantees.

So your claim that investment experts think there is risk in SS, if that's
actually what they say, is not correct. Any downside, if you want to call it
that, is known and fairly predictable. Risk is the result of downward
movements that you can't predict.

--
Ed Huntress

On Jul 15, 9:22*pm, "Ed Huntress" wrote:

I mean this: There is very little downside risk in Social Security, as there
is very little downside risk in, say, Treasury bonds. But. in contrast, all
private investments have downside risk. There are no guarantees.

So your claim that investment experts think there is risk in SS, if that's
actually what they say, is not correct. Any downside, if you want to call it
that, is known and fairly predictable. Risk is the result of downward
movements that you can't predict.

--
Ed Huntress

There is little upside reward in Social Security too. There are two
main problems with Social Security. The first is that it is no way
close to enough to retire on. And the second is the money that is
taken reduces the amount you have to spend on being sure you have
enough to retire on.

And yes the investment experts say Social Security is inadequate. You
are taking a considerable risk if you depend on Social Security to
provide a significant part of your retirement. Can you really predict
how they are going to revise Social Security when there is only a
couple of workers per retiree?

There is considerable risk in government bonds. When the interest
rates rise, the value of bonds goes down. Sure held to maturity they
will pay the same amount. But you could have not bought them and
bought the higher interest rate bonds later.
So although you get the interest rate you thought you would get, you
lost the opportunity to buy bonds that pay more. Or if you need the
money now, you will have to take a loss on the bonds.

Dan

On Jul 15, 10:47*pm, "Ed Huntress" wrote:




Yeah, well, no disagreement there, except that the risk in government bonds
really is very low compared to private equities.

The risk is lower for default. The risk of interest rates going up is
exactly the same.

What you're calling "risk" is the risk that you can't live on it. That's
true enough, but you know roughly how much it will be. That's the security
part, and anyone who had his 401k creamed a few years ago (raising hand
here) has a personal sense of the difference.

There is no risk that you can't live on it. That is certain. It does
not help to know how much it is unless it is worth something. I
rolled my 401k over to an IRA as it provided better options. And my
IRA did go down, but always remained much more valuable than my Social
Security. So my personal sense is that even with a significant
recession, the 401k is much better than Social Security.

Have you funded your 401k with the same amount of money that is taken
for Social Security?

Ed Huntress

I am going to stop here. I think further discussion is useless. I
can see that I am not going to learn anything about investing from
you, and I do not see you learning anything from me.

Dan

wrote in message
...

On Jul 14, 10:57 pm, "Ed Huntress" wrote:

But that would upend the idea that Social Security is *secure*. Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress


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


Reply:
The excess SS money is a cash cow for the Federal government, hiding even
higher deficits. My suggestion, is any SS / Medicare surplus be used to buy
down the national debt. Any buy down lowers the debt limit by that much and
the government can not spend the money as part of the general fund.

"Califbill" wrote in message
m...
wrote in message
...

On Jul 14, 10:57 pm, "Ed Huntress" wrote:

But that would upend the idea that Social Security is *secure*.
Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real
economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress


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




Reply:
The excess SS money is a cash cow for the Federal government, hiding even
higher deficits. My suggestion, is any SS / Medicare surplus be used to
buy down the national debt. Any buy down lowers the debt limit by that
much and the government can not spend the money as part of the general
fund.

On Aug 11, 12:11*am, "Ed Huntress" 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

wrote in message
...
On Aug 11, 12:11 am, "Ed Huntress" 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?

--
Ed Huntress

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.

--
www.wbnoble.com

"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


--
www.wbnoble.com

On Wed, 10 Aug 2011 19:15:55 -0700, "Califbill"
wrote:
snip
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.
=============

This is also known as "counting your chickens before they
are hatched," or possibly "mark to myth" asset valuation.

On Aug 11, 9:28*am, "Ed Huntress" wrote:

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

--
Ed Huntress

I believe that as long as one can prove that one is accumulating
assets for retirement, that one ought to be able to pay less FICA in
return for not collecting Social Security upon retirement. One would
still have to pay some FICA to support the retirement of those that
need help. In other words people should be free to choose where the
money is invested. I do not believe it should be a government
decision . Some people might invest in Bonds, some stocks, some
rental property. There is no one size fits all solution, but the
current scheme does just that.

Dan

On Aug 11, 10:59*am, "Ed Huntress" wrote:
"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



--
www.wbnoble.com

Bill understands. You do not. Have you spent much time learning
about investments?

Dan

On Thu, 11 Aug 2011 13:26:39 -0700 (PDT), wrote:

www.wbnoble.com

Bill understands. You do not. Have you spent much time learning
about investments?

You mean Dot, since Bill = "."