saluki9
Thinks s/he gets paid by the post
- Joined
- Feb 23, 2005
- Messages
- 2,032
brewer12345 said:Heh, so what do you think of SPIAs?
I have mixed feelings about SPIAs.
I think that for people who aren't interested in leaving money to their children or who have limited resources they can be a very helpful solution. Yet, the fact remains that they purchaser is trading the risk of running out of money for the credit risk of the insurance company.
Concerning the previous posts...
I think the problem here is that we have two very different types of investors debating the same solutions. Whereas Nords and Brewer might be happy accepting very high volatility for higher returns, most investors have other worries than their terminal value. If all you care about is your portfolio at time X, then correlations don't mean much to you, you should just invest in the securities with the highest expected reutns. Whether LQD has higher expected returns than the Lehman Ag, I will leave to your own estimate