See post #72810I confess I didn't understand a lot of that post, but it didn't really show how the two strategies compare. Where are the actual calculations?In that post you write Example;If S&P ‘all-in’ average return, with dividends, is 14%S&P max drawdown is 53%= 14% (1 – 53%)= 14% (47%)= 6.58%This seems wrong. The average 14% return includes the drawdowns. You are counting them twice. Further by subtracting 53% of the returns from the annual average return, you are assuming the 53% drawdown happens every year.If Account #A has a risk of 50%+ drawdowns, then it's risk-adjusted returns are its gross returns times 1-drawdown. At a 50% drawdown, the risk-adjusted returns are 50% of the gross returns. At a 25% drawdown the risk-adjusted returns are 75% of the gross returns.This makes the same mistake. The drawdowns only happen occasionally. Averaged over many people, you get the 14% despite the drawdowns. Some will be unlucky and get less, others will be lucky and get more. I still don't see a clear argument for why IULs beat S&P.
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