Not exactly same thought but similar. People recommend equity/debt split as per age. I am wondering why not go all-in into equities ALL the time and avoid debt completely even in retirement! Buy PUTs for your protection!
You can buy PUTs for 20% of your portfolio. It would cost around 8% for at the money or slightly in-the money puts for one year out. This would 1.6% of your total portfolio. The reasoning behind buying PUTs for 20% of portfolio is that given in any year you would not require more than 4% of portfolio for your use and any down turn should not last more than 5 years to come back. And you are well protected for 5 years! But on other side your all-in equities would out perform debts comfortably over long time.
People work hard and accumulate so much wealth but that gets deteriorated due to debt component. So why not use this strategy? Would love to hear opinion from experts!
You can buy PUTs for 20% of your portfolio. It would cost around 8% for at the money or slightly in-the money puts for one year out. This would 1.6% of your total portfolio. The reasoning behind buying PUTs for 20% of portfolio is that given in any year you would not require more than 4% of portfolio for your use and any down turn should not last more than 5 years to come back. And you are well protected for 5 years! But on other side your all-in equities would out perform debts comfortably over long time.
People work hard and accumulate so much wealth but that gets deteriorated due to debt component. So why not use this strategy? Would love to hear opinion from experts!
Statistics: Posted by mystiq — Mon Nov 24, 2025 12:28 am — Replies 34 — Views 2651