Upside Investing -- Invest At Risk Without Risking Your Base Living Standard
larrykotlikoff.substack.com
I've gambled at casinos twice. Each time I left my credit cards in the hotel room and took $100 in cash. This was the maximum I was prepared to lose doing what my economics training and common sense taught me was irrational -- gambling at bad odds.
Fantastic article Larry! I have a question about practical implementation of Upside Investing. TIPS aren't really a risk-free or safe investment unless they are held to maturity. If one were to gradually cash out of risky stock or bond funds and into long-term TIPS or a TIPS fund then when the time comes to cash out of the TIPS for living expenses there is the risk that the market value of the TIPS could have gone up or down due to changes in inflation rates or interest rates. As a practical matter, it seems in order for Upside Investing to work, one should only invest the proceeds from the risky investments into individual TIPS (via auction or secondary markets) dated and sized to mature in amounts that match each year's (or even better each quarter's) desired base living standard floor. Thoughts?
I just discovered I-bonds and assume they are even better until one maxes out the limit. Make sense?
Fantastic article Larry! I have a question about practical implementation of Upside Investing. TIPS aren't really a risk-free or safe investment unless they are held to maturity. If one were to gradually cash out of risky stock or bond funds and into long-term TIPS or a TIPS fund then when the time comes to cash out of the TIPS for living expenses there is the risk that the market value of the TIPS could have gone up or down due to changes in inflation rates or interest rates. As a practical matter, it seems in order for Upside Investing to work, one should only invest the proceeds from the risky investments into individual TIPS (via auction or secondary markets) dated and sized to mature in amounts that match each year's (or even better each quarter's) desired base living standard floor. Thoughts?