Recently, I wrote a blog post about bonds and other vehicles vs. fixed indexed annuities. I focused on a whitepaper that I wrote that illustrates a case study on retirement income.

More recently, there was an article on Kiplinger’s, which you can find in the references below; the article discusses several different points, but the one that sticks out to me is the “How Market Losses Take a Toll on Portfolios” paragraph. It makes the argument for FIA’s in a growth portfolio.

Jack Marrion wanted to know what losses did to a portfolio. He took a 50-year time frame (1/1/1960 – 1/1/2010) and used the returns of the S&P 500 with three different scenarios: no dividends, dividends, and no dividends and no losses. Below is a chart showing the results of an initial investment of $1,000.


Scenario Ending Balance
No Dividends $18,615
Dividends $84,200
No Dividends No Losses $179,624


The no dividends, no losses scenario is more than double the dividends scenario. That is a huge difference. In fact, there is a product out there that allows for your clients to participate in the straight S&P 500 at a 52% participation rate with a 0% floor. Let’s think about that product with the above scenario results. The no dividends, no losses scenario resulted in an ending balance of $179,624; 52% of that would be $93,404.48. That is still more than the dividends scenario ending balance of $84,200. In fact, it is almost 11% higher.

I know that you want to do what’s in the best interest of your clients. In my opinion, if you are not at least considering fixed indexed annuities in your clients’ portfolios, you may being doing them a disservice.  Call us today to learn more about the product mentioned in this blog post, along with other products that may suit your clients’ needs and interests.

Dustin Casebolt

Director of Advisor Development



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