What is Your Favorite IUL Index Allocation Strategy Today for Bear/ Side Way Market?

Jun 4, 2016

  1. blueskyqtc
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    blueskyqtc New Member

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    Dear all friends here,

    As today, many people are expecting that for next few years, the stock market is going down, or go to side ways. Market has been peaked for many years and is due for correction.

    Here are the recommendation options I got as below:

    1. Go to fixed account with guaranteed 4% ( 4% for North America/Midland) then change later ( When ? I may miss the market rebound here. )

    2. Go to fixed account at 50%, and another 50% goes to SP500 Annual point to point.


    3. 25% on SP500 PtoP, 25% on Nasdaq, 25% on Dow Jones, 25% on monthly point to point.

    4. 50% on SP500 annual Point to Point, 50% on SP500 monthly Point to Point.

    5. Go to SP500 annual point to point at 100%, But with systematic monthly premium allocation ( just like monthly premium payment ). So each new monthly premium will have different 12 months period for SP500 annual PtoP.
    ( so you will have more comparing starting and ending points ).

    What is your favorite IUL index allocation strategy today for bear/ side way market? and why ? Thanks!
     
  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    I'd probably pick #4. I don't like over-engineered products, so I try to keep it simple.

    Remember: the policy will not lose cash values as markets decline. So, if you had $25,000 in cash value, it is all 100% preserved (aside from policy costs) so it can rebound as markets rebound. This is how you take advantage of down markets using indexed products - life and annuities.

    For "Yo-Yo" markets (up and down volatility without much of any growth), this is perfect. Just make sure you're managing and monitoring ongoing policy costs with the client.
     
    DHK, Jun 4, 2016
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  3. jboussea
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    jboussea Guru

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    No expert here but I would say Go with 5 ... or just stay the course ... that's the advantage of having the floor especially with the 3% 8 year guarantee of NA
     
    jboussea, Jul 12, 2016
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  4. TevisVerrett
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    TevisVerrett Expert

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    Thanks to the OP for this question. I too have been scratching my head as to what to put our clients into.

    Just a bit of clarification, In talking with NA customer service. . .the FIXED 4% carries the highest fees of all the indices. So 4% is not really 4%

    What it actually is, she couldn't say. So words to the wise. . .
     
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