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In Reply to: Re: Re: Re: Re: Re: Whole Life? What the hell?!!! posted by UML on June 29, 2001 at 11:12:11:
: Please, do not consider me your competition; I do not concede by recognizing you as mine. At best, we operate in different markets. Competitors would be NYL, Prudential and so forth.
: Pressing on...I worked for SSB when I began, and the brokers were great. I also stopped over at Merrill Lynch and MSDW as well. I know the operations and the clientele. But I do not know how you can believe that 1 year of 26% gain (if possible) offsets a loss the following year. I will not argue the topic of investments as I have far more extensive background in it and I wouldn't believe in Cash Value Accum if I hadn't seen it.
: One note, mutual funds are competitive. It is all about performance. Who does the best and attracts the most clients and so on. Well, perhaps they report a 26%, but...if they're funds are anywhere near the average turnover rate of funds in this country, and I suspect they are, that gain has been chomped on by the IRS several times over before the investor even got it. How so, since funds are so competitive, they turnover stocks quickly and frequently, which is why the average turnover rate is 109%! They're not paying people based on capital gains, they're paying income taxes, then you have to pay income taxes, too.
: I'm not the only person objecting to this, see the Motley Fool website. They, too, note the huge amount of gains lost due to turnover, taxes, inflation, management and so on. I wouldn't see how (1) year of a 26% gain would encourage anybody, and if they maintain 26% year-over-year, well they know stuff nobody else knows. I believe only Warren Buffet could conceivably have those type of gains to his credit.
: But you knew all this, right? Oh and believe me, there's more. I encourage investing don't get me wrong, and I don't offer anything without believing in it and using it. Personally, that's just me. But I'd love to meet these people so devastated by WHOLE LIFE OR CV. I'd never offer a policy to someone who could't afford it, and nor would the company, and nor should the client accept it. I don't see how people are 'desvastated' by CV. They do know they can surrender the policy at anytime and get term if need be, right?
please READ before you write back: i did not say 26% gain offest losses. i said it offsets a gain of a guaranteed 5% (as example)
the turnover rate for the fund i mentioned is: 1%
believe it or not. the return (24%) was for 5 years in the Class B shares.
the fund name: Smith Barney Aggressice Growth Fund (managed by Richie Freeman)
the people devastated by CV usually had VUL or VL policies where they ended up OWING money. call it lack of education or a bad policy: it happens often.