Don't Compare to the S&P

[vickiegram]

@evanburnside12 Don't take my statement literally but understand the context. Long term investment is the key and answer to your questions.

 

[shaimaaalmahdy]

@evanburnside12 They don't want to address this, and the idea is "don't panic," which if you're middle-aged is maybe reasonable, but when you're in retirement well, lol.

 

[caitlynlovesjesus]

@evanburnside12 If you dollar cost average during that period you would have been rewarded!

 

[jeshurun1111]

@evanburnside12 May I ask which securities licenses you hold?

 

[resjudicata]

@jeshurun1111 He doesn’t hold any.

 

[caitlynlovesjesus]

@jeshurun1111 Who are you asking? As for me I have Series 6, 63, 65, 26, life/health, property/casualty, and mortgage loan originator licenses.

You?

 

[jeshurun1111]

@caitlynlovesjesus I was asking OP. Life/health, 6, 63, CLTC, and working on 65.

 

[caitlynlovesjesus]

@jeshurun1111 65 was pretty tough, you got this!

 

[jeshurun1111]

@caitlynlovesjesus Thanks!

 

[resjudicata]

@jeshurun1111 IULs are different, they have 0% floor and there’s caps on what you can gain, and the broker, or insured aren’t the ones doing any financial moves. Whereas a VUL you do need security licenses to be able to even talk about those. Don’t get it confused.

 

[jeshurun1111]

@resjudicata I didn't say he needed a securities license to sell IULs. I'm saying he's talking out his ass to people who are licensed and actually work with securities.

 

[evanburnside12]

@jeshurun1111 No you may not.

 

[jeshurun1111]

@evanburnside12 Then kindly shut the fuck up

 

[ajharmon89]

@evanburnside12

Forget average returns of the market. Look at average portfolio returns. They are far lower than average market returns.

I don't understand this at all. Hit a Vanguard or Fidelity total stock market index and that will be your return.

The guarantee is the only valid point you make. That should be what you're highlighting.

 

[evanburnside12]

@ajharmon89

Hit a Vanguard or Fidelity total stock market index and that will be your return.

What are their average returns over decades, through market crashes? Do their investors sell during crashes and buy at the top? Yes, they do this often. That's going to be an inherent problem with volatile asset classes.

 

[ativyl]

@evanburnside12 @ageofreason2014 is correct in his corrections. You aren't understanding the way the index is scored. Falling outside the index or even going to 0 inside the index count in the returns. Average investors earn significantly less than the SP500 because:

1. They time poorly, on average this is almost forced.
2. They invest in things other than the SP500.

FWIW people do get the "advertised returns" all the time.

You are right that very safe liquid assets shouldn't be compared to the SP500. Whole life insurance should be compared to money markets or at worst something like short term bond funds. Stocks both from a volatility and a return perspective are something like the spread between a short term bond fund and cash held of 8-20::1 leverage.

 

[evanburnside12]

@ativyl

FWIW people do get the "advertised returns" all the time.

Completely false. No one ever talks about average investor returns.

https://www.crews.bank/blog/sp-500-vs-average-investor

 

[ativyl]

@evanburnside12 Those are two different concepts: do people who buy and hold SP500 funds get the SP500 returns? Yes. Do average investors get those returns, no. The average investor invests some of their funds in lower returning assets, including incidentally whole life insurance. Average investors underperform indexes for high volatility assets they are invested in by about 150 bp not by 600 bp as per your chart.

 

[evanburnside12]

@ativyl What's the difference between 2015 (when this graph was generated) and more recent years? We're further away from a crash. What does that tell us? People lose A LOT of money in crashes. If people can't stomach 30-50% corrections then they shouldn't be in the market. People should be expecting it. Instead all they are told is 12%. People are lied to about markets.