UnThreaded | Threaded | Whole Thread (318) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75794  
Subject: Re: Hi gang... wow!!! Date: 9/17/2013 1:08 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 7
2. Fees are irrelevant if a "cheaper" strategy gets lower net net returns,
This is true, but the problem is that innumerable studies have shown that there is a very strong (negative) correllation between overall performance and fees. On aggregate, higher fees = worse performance, almost always.

4. The passive S&P B&H strategy falls to a well designed IUL when risk-weighted. In other words, all other aspects equal among investors, the random catastrophic occurrence during down markets will hurt the aggregate performance of the S&P B&H sufficiently that all S&P investors will get a lower return than all IUL holders.

Dave, you keep saying that, but do you have any hard examples or data to show us? If nothing else, a set of parameters to my spreadsheet that shows the S&P account ending up with less money than the IUL account? Your own spreadsheet? Anything? Anything that uses the actual historical price data?

I bet that for any time period more than 10-12 years you can't.

{hell, I've toyed with the idea of adding to my spreadsheet the ability to make a one-time withdrawal, so we can see what happens. Guess maybe it's time to go ahead and do it.]


hurt the aggregate performance of the S&P B&H sufficiently that all S&P investors will get a lower return than all IUL holders
Laughable, considering that the S&P account gets the dividends but the IUL doesn't.

The efect of compounding the reinvested dividends for 40 years is enormous.
Without dividends, the S&P account grows to $575,000, but with reinvested dividends it grows to $1,500,000. That's a $1M hurdle that the IUL somehow must overcome.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (318) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement