No. of Recommendations: 1
"In the timeframe of interest -- 25/30/35 years -- a dead-simple Buy & hold of the S&P500 blows the socks off an IUL."
Not if it's required to have no less cash access at any point in time as the IUL... the IUL beats it so strongly, you want to wave your hands and avoid actually running the comparison.


pick your annually adjusted strategy, and let's define what the worst case cash value is off annyu prior high to subsequent low. Then the IUL strategy will be adjusted annually to incur up to the same risk (or whatever you want to rename that factor.)
What is this "IUL strategy" you speak of?
Isn't the IUL strategy "buy an IUL"?
The S&P500 B&H strategy is "buy and hold a S&P500 index fund".
To compare like to like: "Initial deposit $15,000, monthly deposit $150/mo".

we have to define what is the worst cash position off of any prior high
No, not at all. A 50% loss from a high of $600,000 is better than a 0% loss from a high of $200,000. You're not going to claim that $200K is better than $300K are you?

Already have, and you've persistently refused to offer a comparatively safe (err... "george-free") comparison.

Your turn... show what you propose as your basis to be compared against, and I'll adjust the "george" up on the IUL strategy to compare.

Like JAFO, I don't recall seeing any spreadsheet or equity curve from you.

Basis for comparison: As stated above. "Initial deposit $15,000, monthly deposit $150/mo". For 30 years, then compare the 30 year balance. Optional extra: At the 30 year point, begin withdrawals of net $1500/mo, increase by 3%/yr for inflation.

The insurance companies all state that IUL is suitable only for long-term, and is not suitable for short-term. You keep insisting that IUL *is* suitable for short-term needs is contrary to this. Here's one example of what they say:
"IUL is a long term commitment with surrender charges in the first 9-15 years that can be punitive, so the need for liquidity can’t be a priority. Consumers who need liquidity are not suitable for IUL."

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BTW, I found an interesting presentation, looks like maybe for agents. http://www.atlasadvisorygroup.com/articles/Atlas_EIULPresent...
The "Growth of $100" graph on page 4 looks familiar. ;-)
Page 7 shows how they implement the strategy. IIRC, this is just what you once said, fixed-rate instrument for the guaranteed part and options for the upside participation.

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Reading between the lines on your last few posts, I realized that you aren't actually thinking of an IUL at all. An IUL "strategy" is simple -- buy an IUL, accept the returns the insurance company gives you. The End.
But you've been talking about "IUL strategy will be adjusted annually" and "deepest chasm of risk is, in order to allow equal exposure" and "strategically increasing the risk/reward profile on the IUL".

It appears that you are talking about a multi-part investment where an IUL is the "safe" part and something else (options? technical volatility arbitrage?) provides the juice.

On this subject, the ONLY thing I want to compare is a straightforward IUL and a straightforward B&H of a S&P500 index fund. The only extra thing I have noted is that there is a fairly simple technique to reduce the volatility and drawdown of the S&P500, by a modicum of mechanical rule-based market timing. But I'm not going to talk about that, other than to say that there are ways to temper the drawdowns. Gotta talk only about things that normal (non-investment fanboys) people would do. And for most people, making a constant monthly deposit is the extent of what they will do.

Note the I personally do not B&H anything, not do I have an significant position in the S&P500, so I don't really have a dog in this fight. That you can find a way to improve on an IUL by doing some of the things you have alluded to does not surprise me. But we're not going to get into a contest of "Dave can build a strategy that's better than Ray can." I'm totally uninterested in that.

But if you come up with a mechanical rule-based *backtestable* system, then the appropriate board is Mechanical Investing.

If you want to discuss retirement investing, then the appropriate board is Retirement Investing.

Or if you want to read people who are frigging investment geniuses, as witness their outstanding returns for their entire investing career -- all the way back to 2011 -- SeekingAlpha web site. ;-)
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