X-Message-Number: 8701
Date: Thu, 30 Oct 1997 08:08:34 -0500
From: Paul Wakfer <>
Subject: Re: Term Insurance

Sorry, for the late reply. I put this aside to double check it.
I then forgot it and don't have time. Since I am quite certain
I am right I'm sending it anyway.

On Mon, Sun, 26 Oct 1997 12:33:24 +0100, John de Rivaz wrote:

> Therefore investment with monmthly payments into in a good
> technology based mutual fund is a good idea.

John, I have no problem with equal monthly payments to buy a stock
portfolio, but

> In times of bad market performance, you monthly payment buys more 
>units, and you benefit on the upswings.

the benefit reported by this statement is an economic fallacy. Proving this
is not simple, but if you take some examples and work through the various
scenarios of changing stock prices and monthly buying methods (based on no
foreknowledge of stock prices, of course) you will see that there is no
benefit to this method over any other for which you make the same average
outlay per month.

On general principles, I did not believe this when I first heard of it,
but I never got around to disproving it until I found my daughter using
the scheme and touting it because some book had stated that it was
beneficial. She still uses it, since it is not *worse* then any other
method and it *is* convenient.

-- Paul --

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