No. of Recommendations: 1
Below is a list of the worst 5 N-month returns for the S&P500, for a few value of N. This can be used to set your expectation of the kind of losses you will have.
In a nutshell, for short periods of time you can expect to see a worst-case loss of -10% to -20% month-to-month, and about -40% year-to-year loss worst case.

1950 to 1987 1950 to 2013
(To allow for 25 years
of growth after 1987)
1950 to 1987 1950 to 2013
1-month 1-month
-21.5% Sep-1987 -21.5% Sep-87
-11.5% Aug-1974 -16.7% Sep-08
-11.1% Oct-1973 -14.5% Jul-98
-9.7% Feb-1980 -11.5% Aug-74
-8.7% Mar-1970 -11.1% Oct-73

2-month 2-month
-28.0% Sep-1987 -28.0% Sep-87
-23.2% Aug-1987 -24.1% Aug-08
-19.2% Jul-1974 -23.2% Aug-87
-15.6% Apr-1962 -22.7% Sep-08
-15.4% Jun-1974 -19.2% Jul-74

6-month 6-month
-30.8% Mar-1974 -41.8% Aug-08
-23.4% Feb-1974 -35.1% May-08
-22.3% Dec-1961 -33.8% Jul-08
-19.5% Dec-1969 -30.8% Mar-74
-19.4% May-1987 -30.4% Sep-08

12-month 12-month
-39.0% Sep-1973 -43.3% Feb-08
-28.9% Oct-1973 -39.0% Sep-73
-28.2% Aug-1973 -38.6% Jan-08
-26.6% Dec-1973 -38.1% Nov-07
-24.1% Jul-1973 -38.0% Mar-08



*******************************
A similar comparison of the worst 5 returns of the S&P500 and an IUL, for various numbers of years. In the short-term and intermediate-term, the IUL soundly beats the S&P. As the number of years gets longer, the relative performances are reversed. The crossover is around the 12 year mark. At 15 years the S&P is significantly ahead, about 80% vs. 70%. At 25 years the S&P has lapped the IUL, about 500% vs. 200%, a 6-fold increase vs. a 3-fold increase.

1950 to 2013
*** S&P500 B&H **** *** IUL ***
1 year 1 year
-43.3% Feb-2008 -0.2% Apr-1974
-39.0% Sep-1973 -0.2% Jun-2002
-38.6% Jan-2008 -0.2% Apr-2002
-38.1% Nov-2007 -0.2% Jan-2002
-38.0% Mar-2008 -0.2% May-2002

7 year 7 year
-24.7% Feb-2002 14.3% Apr-1971
-21.0% Mar-2002 16.0% Apr-1972
-17.8% Sep-1967 16.6% May-1972
-17.3% Jan-2002 21.2% Apr-1973
-11.3% Nov-2001 21.6% Apr-1968

15 year 15 year
78.6% Sep-1959 60.9% Apr-1965
83.9% Dec-1959 70.9% Apr-1967
85.7% Jul-1997 72.6% Apr-1964
89.2% Dec-1997 73.5% Apr-1969
90.7% Nov-1997 76.4% Apr-1966

25 year 25 year
457.1% Jul-1957 197.5% Apr-1957
475.4% Jun-1957 197.5% Apr-1956
485.2% May-1957 197.6% Apr-1955
527.4% Mar-1957 197.6% Apr-1959
527.7% Sep-1956 219.1% Apr-1954
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement