No. of 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.
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