Social Security Solution Much has been debated regarding our Social Security system and its viability as a long-term source of retirement funds for our population. More recently, the idea of investing these funds in the stock market has been proposed, with proponents citing likely higher returns, and opponents citing relatively high risks. May I suggest the government seriously consider utilizing a risk-management technique used by individual investors that captures the best of both worlds, which is commonly called “dollar cost averaging.” Instead of putting a large sum of money into the stock market at one time, we invest that sum in equal, periodic increments over a long period of time, regardless of price or market conditions. Thus, when prices are low, stocks will be purchased at lower prices (of course, when prices are high, less shares are purchased). If the stock markets do well in the coming years, this technique could enhance the returns on our Social Security funds, and additionally, during declining market periods, it will enable the Social Security funds to be invested at lower prices. Such a place does not assure a profit and does not protect against loss in declining markets. All told, dollar cost averaging represents the most viable compromise in the ongoing debate over how to invest our social security funds. ANDREW C. R0TH Branch Manager Linsco/Private Ledger Glendale
