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To: Tom Chwojko-Frank who wrote (103412)	5/15/2000 1:16:00 PM
From: GVTucker	Read Replies (2) \| Respond to of 186894

Tom, RE: The at-risk portion of a portfolio can be hedged with the more conservative portion (by buying options for instance) in exchange for lower returns on the conservative part in such a way that there is near zero-risk. The upside is the at-risk portion may do great. The downside is that it generates lower returns than if it didn't need to hedge anything. But it's still better than T-Bills. Sorry, but if you hedge an equity portfolio so that there is 'near zero risk', your return cannot do much better than T-Bills, and given the transaction costs of such an undertaking, could do worse.

To: Tom Chwojko-Frank who wrote (103412)	5/15/2000 2:35:00 PM
From: willcousa	Read Replies (1) \| Respond to of 186894

Tom, I certainly agree that there still needs to be a safety net. I don't know that the solution has to be done in the public sector. Incidently, the T-bill rate would be an improvement in the return that people now receive vs. the taxes that are put in. I don't feel comfortable with the idea that the general public can't manage investments. Some very poorly educated people are able to acquire product, price it, resell it and make terrific profits. And they do this under risky conditions. Witness drugs and prostitution.