- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Northwestern Mutual - Should I?
Posted on 8/21/14 at 3:56 pm to Maderan
Posted on 8/21/14 at 3:56 pm to Maderan
quote:
Whoever is saying to just index the S&P and go home is just wrong. That may be what is good for you but it certainly doesn't apply to everyone. If you are going to argue that point why not advocate just buying the index in Emerging Markets? It has a higher long term rate of return. Active and passive each can have their place in a portfolio. An average investor can beat the S&P over the long term with proper diversification and active management (this has a lot to do with the disproportionate effect of losses and gains ie it takes a 100% gain to offset a 50% loss).
S&P isn't the 'best' as nothing is under all scenarios, but it has beaten virtually all money managers over time. Emerging markets,tech and small cap have done even better over time, but they carry much, much more risk within specific time frames. While saying buy the S&P is an oversimplification, I was making the point that even that oversimplification is better than buying mutual funds or stocks from an investment adviser more than 90% of the time.
quote:
Most active funds don't beat the S&P every year, nor do they strive to.
They have no shot of beating it every year, and that's not a problem. The problem is the vast majority don't beat it over time regardless of how diversified or concentrated they are. Again, we can discuss whether S&P 500, total market, mid cap , tech, or some combination would be best for a particular individual, but 'even' the S&P does better over time than over 90% (studies show from 75% to 99%) of money managers.
so I stand by my statement saying buying the S&P is a better decision than paying a money manager or mutual fund....AND there's nothing to say the particular adviser/broker/agent/manager is worth a flip at all. The fact that he passes a series whatever doesn't in any way guarantee he has judgment.
I understand most people don't have the time to learn all of this and the BEST scenario is to find a competent fee based adviser to put them in a mix of ETFs and be done with it, but who's to say the adviser has any idea what he's doing? For these people, a computer based service is probably a MUCH better path that looks at their risk tolerance and allocates their portfolio to a mix of ETFs.
cheers!
0
Posted on 8/21/14 at 3:59 pm to GoCrazyAuburn
quote:
Thanks for agreeing with our argument?
ETA: You can keep arguing a hypothetical all you want. Doesn't mean it holds any weight in reality.
I don't agree, I just acknowledge there is no chance of progress as you continue to argue points I don't make, so I give up.
Posted on 8/21/14 at 4:04 pm to Maderan
quote:
I think anyone would take a guaranteed 8% after fees and taxes for the next 30 years as a portion of their portfolio. If fact, most insurance companies and pension plans would invest heavily in this right now.
I agree. I've also seen old WL policies that have an IRR of around 8% for the prior 30 years or so. I'm not arguing that is the norm or anything, just that it has happened. If you have a properly structured policy with one of the best companies, it isn't the abortion that many claim it to be.
quote:
Isn't this basically fee refunds based on actual experience versus actuarial expected outcome?
Sort of. The expense ratio is just an expense ratio. You pay company X $1.00 of premium, how much do they take out to take care of expenses and what not. Obviously, if you have a policy with the company with the lowest expense ratio, then they have more money to invest/return to policyholders as a dividend.
Mortality isn't really a refund, seeing as actuaries don't really set it. It is based off of actual company experience. Actuaries just track the rates and set standards/benchmarks. The company that has the lowest number of claims to pay, has the lowest mortality, thus again, more money to invest/pay as dividends.
So, even if investment returns go down, the dividend rate could actually go up if the other two factors are favorable.
Posted on 8/21/14 at 4:06 pm to Ole War Skule
quote:
I don't agree, I just acknowledge there is no chance of progress as you continue to argue points I don't make, so I give up
You have argued that people shouldn't pay an adviser because statistics have shown that they do better.
We have shown that that is not the case.
I don't know what else you want from us.
Posted on 8/21/14 at 4:08 pm to GoCrazyAuburn
quote:
I don't know what else you want from us.
He wants us to forget reality and ride off into the sunset on unicorns chasing rainbows.
Posted on 8/21/14 at 4:09 pm to Janky
I do like rainbows.
Posted on 8/21/14 at 4:19 pm to GoCrazyAuburn
Whole Life...
First off, there are maybe three companies out there that I would even briefly consider purchasing it from.
Once we get past that... you know the old saying, if you have 2 quarterbacks you have no quarterbacks? That's how I feel about WL. It tries to serve two masters - life insurance and investment return.
Unless you are very wealthy and need life insurance proeeds to pay an estate tax bill, most people by the time they approach say age 75 or so don't need life insurance any more (or they really only need enough for final expenses), and this is the age where term insurance pretty much is unavailable. Now, at that point, you could cash out the policy. But, considering the costs of the policy, you may well have had better investment results in a non-whole life investment.
First off, there are maybe three companies out there that I would even briefly consider purchasing it from.
Once we get past that... you know the old saying, if you have 2 quarterbacks you have no quarterbacks? That's how I feel about WL. It tries to serve two masters - life insurance and investment return.
Unless you are very wealthy and need life insurance proeeds to pay an estate tax bill, most people by the time they approach say age 75 or so don't need life insurance any more (or they really only need enough for final expenses), and this is the age where term insurance pretty much is unavailable. Now, at that point, you could cash out the policy. But, considering the costs of the policy, you may well have had better investment results in a non-whole life investment.
Posted on 8/21/14 at 4:22 pm to GoCrazyAuburn
quote:
You have argued that people shouldn't pay an adviser because statistics have shown that they do better.
I never said any such thing, which is why I surrendered.
cheers!
Posted on 8/21/14 at 4:49 pm to Ole War Skule
quote:
I never said any such thing, which is why I surrendered.
Then please state your argument, as two people have mistaken it now.
Posted on 8/21/14 at 4:54 pm to LSUFanHouston
quote:
LSUFanHouston
I don't necessarily disagree with much of your post, especially the few number of people I would actually get a policy from. We've discussed this before, even if a while ago, and I respect your opinion.
As to the age 75 part, if the policy couldn't fund itself at that point, it would be a crap policy I would say.
Posted on 8/22/14 at 7:26 am to baybeefeetz
So is baybeefeetz getting some 'surance or what?
Posted on 8/22/14 at 8:40 am to wasteland
Nope, he's buying an inverse indexed etf to take advantage of the coming bubble burst
Page 5 of 5
Popular
Back to top
Follow TigerDroppings for LSU Football News