What is Your Favorite IUL Index Strategy Today for the Coming Bear/side Way Market ?

Jun 1, 2016

  1. blueskyqtc

    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.

    It seems that Historically SP500 Annual Pto P has given the highest IUL return for last 20 years.

    So I have been struggling to recommend the best index allocation strategies for my clients. I asked around people on this. 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 ).

    Some people says that this is the best and (also less risk to get 0% return ) because of dollar cost averaging. Some other people says that this is Not good, because client actually lose lots of investment time, comparing to those clients who pay premium and invest annually at the beginning of each year.

    So in your opinion, if you are buying a new policy for yourself now,

    A. what kind of index mix strategy you will use for yourself ?

    B. What is the index strategy you will recommend to your clients today ? which one above will make more sense for the coming bear/side way market ?

    C. Does dollar cost averaging ( monthly premium allocation ) really better than the annual premium allocation and why ?

    D. Do you recommend that client should stay with the same index strategy each year, no matter what happens in the market, or do you recommend that client do annual adjustment on the index allocation, based on their own forecast, or based on our forecast as agents ? ( during our annual policy review meeting with client )

    E. What is the realistic index return our client should expected from their IUL for next 3, 5, or 10, 20 years?

    To be honest, I really don't know how to predict/forecast/time the index return market. And I am afraid of showing client 0% policy return, comparing with my illustration used, in bear market soon.

    Looking forward to all of your help here soon! Thanks a lot!!!