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URL:  http://boards.fool.com/because-when-you-need-your-liquidity-and-the-30469079.aspx

Subject:  Re: Retirement, college, and Obamanomics Date:  1/6/2013  12:43 AM
Author:  Rayvt Number:  71219 of 76421

Because when you need your liquidity, and the markets down, you can't afford to be s.o.l.
-and-
order to survive 30 years, your account has to survive 30 years intact.


This is an example of the thing that has always driven me crazy about insurance salespeople. In one breath they talk about 30 years, in the next they talk about some shorter term. They keep shifting around the time-frame to meet whatever question or objection you have.

Likewise, they shift between talking about retirement income, leaving money for heirs, and tax savings, to meet whatever question or objection you have. It's like the combination playpen/highchair/walker that new parents get sucker into buying. The salesman makes out like it's a playpen and a highchair and a walker, but it's not -- it's a playpen OR a highchair OR a walker, and when it's filling one purpose it is not filling the others. Moreover, it does each one poorly.

Trying to mash several different objectives into one financial instument is going to cost more and have worse overall results than buying several instruments that each do their one job well.

FWIW, "The August 10, 1998 issue of Barron's reported that worst 30 year period for the S&P 500 since the end of World War II (1955-1984) had an annual return of 9.4%."
"Forgoing the majority of your projected return to protect yourself against an event that hasn't occurred in recent history is very expensive insurance."



Trying to argue in *favor* of a mystical non-strategy supposedly superior to an IUL that nobody has yet brought forth, by randomly choosing any off-the-shelf unstructured IUL is pretty damning in the lack of argument itself.

Nobody is arguing in favor of some other specific strategy. They/we are arguing that IUL's are very costly, and make an impossible promise ("stock market returns without stock market risk." )

It is well known that the optimal strategies for short-term returns are different than for long-term returns. Strategies that focus on low volatility harm your long-term returns. And that's *just* what IUL's brag about, the low volatility and the no-loss floor.
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