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Subject:  Re: Strategy comparison S&P500 vs. IUL Date:  4/3/2013  7:17 PM
Author:  Rayvt Number:  71684 of 78325

Is this the strategy you would recommend to our OP, instead of an IUL?

I'm not in the business of recommending specific strategies to people. Anyway, he couldn't afford what I'd charge. ;-)

If you would *not* recommend a long-term
You keep using that word. I do not think it means what you think it means.

... S&P500 strategy, and you've already admitted it doesn't match the performance of an IUL when safety is considered, why are you trying to push it as superior?

Um, because it *is* superior.

performance ... when safety is considered
The phrase you are looking for is "risk-adjusted return". It's a well-known concept in the field of investigating & analysing strategies. As the words imply, there are two components: 1) risk, 2) return.
It's the return considered in light of the risk. It's not all about "return", nor all about "risk", but the melding of the two. Low risk accompanied by low return is not neccessarily better than medium risk accompanied by high return.

What most people are looking for is the highest return they can get for an acceptable level of risk. And almost always, the lowest acceptable risk is higher than "no risk ever, no way, no how".

Actually, buy&hold of the S&P500 is not even in the category of outstanding strategies. But it beats buying an IUL.
Heck, a simple timing overlsy to the S&P is a large improvement over B&H. Only slighly lower returns but with much lower volatility.

The only time where an IUL is superior to simply buying the S&P is for people to whom any drawdown whatsoever is completely unacceptable