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Stock market...the ride

Stock market...the ride



Agent Training

Agent Training



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Stock market...the ride Stock market...the ride Presentation Transcript

  • Bryan Daly Founder Freedom Equity Group Al Cardi Founder Freedom Equity Group WELCOME
  • Japan’s Lesson • Japan- world’s 3rd largest economy • The US Economy is going through many similar events • The Nikkei 225 Index Japan’s Stock Market down 72%... 20 years later What Happens in a 20 year “BEAR” market?
  • 38,915.44 December 29, 1989 Nikkei 225 Oct 8 2013 13,894.61 Jan 1, 2010 9,346.13 -72.9% below its closing high Nikkei 225 Index 40 year history
  • The reality is some never recover from a double digit loss. . . . . . .
  • . . . . . . . .
  • The reality is some never recover from a double digit loss. . . . Nikkei 225 12/ 20/2013 15,870.42
  • $2,500 $2,281.34 $2,000 Indexed w/14% cap $1,500 Nikkei 14% cap $1,000 $500 89 90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 $0 $271.01 Full Risk Nikkei
  • Indexed Account an Indexed Annuity with Annual Reset The Rewards of with Annual Reset. + Dow + + + 750 1966 + + Indexed Annuity + + + The stock market, specifically the “Dow”, had a net gain of zero from 1966 to 1982. Equity Indexing would have provided growth by participating in the gain of the up markets, but not participating in the loss of the down markets. “Dow” 750 1974 1982
  • The difference that simply eliminating the negative years makes Is Substantial
  • Indexed Fixed S&P 500
  • Imagine if you still had every penny of gains you’d received on your investments! To give you an idea of just how much of a difference having your gains locked in can make, here’s a little quiz… For Agent Training
  • Stocks and Mutual Funds Let’s answer some common questions: 1. How does a Indexed Universal Life (IUL) perform compared to stocks or mutual funds? 2. Is it really true that if you simply hold on long enough, investing in stocks and mutual funds will out-perform just about anything else? For Agent Training
  • Quiz Before we answer that let’s have a lesson in Annual Rates of Return A 25% Average Annual Return Not bad, huh? For Agent Training
  • Do you think it’s possible to, get a 25% average annual return for four years… and end up where you started? • Is it possible to invest $100,000, get a 25% average annual return on your money for four years… and end up with only the $100,000 you started with? • If you answered “no,” you’re in for a real surprise! • But let’s see how much money you actually have in your account… For Agent Training
  • Averages Can Be Deceiving • • • • Year 1 Year 2 Year 3 Year 4 Start with $100,000 $200,000 100% gain $100,000 50% loss $200,000 100% gain end $100,000 50% loss (200% gain less 100% loss divided by 4 years equals) 25% Average Annual return For Agent Training
  • Market Myths How much did you REALLY earn? Actual Return= Zero Average Return= 25%
  • So what good did getting a 25% average annual return do you? • That and a quarter won’t even buy you a cup of coffee, let alone a mocha latte! • You have nothing to show for this rollercoaster ride other than heartburn and a stomach ache. For Agent Training
  • Wall Street illusionists • The Wall Street illusionists have been pulling the wool over your eyes for decades! • You take all the risk, and they get the rewards, whether you make money or not! For Agent Training
  • Shocking Fact #1: • A recent study1 revealed that, for the past 190 years, American stocks have averaged a REAL annual return of only 1.4 percent! • The study did not deduct, commissions or taxes. 1 “Stock market’s real return? Paltry,” by Anthony Mirhaydari, MSN Money, February 1, 2010 For Agent Training
  • Shocking Fact #2: • The typical equity mutual fund investor has actually been losing one percent a year for the past 20 years, after adjusting for inflation.3 3 DALBAR’s 2008 Quantitative Analysis of Investor Behavior For Agent Training
  • Warren Buffet: “I have two rules when investing. • Rule #1) Never lose money. • Rule #2) When in doubt see rule number 1” • “… I advocate indexed investments … for serious cash.” • http://www.berkshirehathaway.com/letters/1988.html For Agent Training
  • Beating The S&P 500 • “Over the 15 years ending October 31,2005, 94.28% of actively managed funds did worse than the S&P 500” John Stossel, author and reporter ABC’s 20/20. Myths Lies and Downright Stupidity by John Stossel For Agent Training
  • Beating The Market • “While 95% of funds failed to beat the S&P 500 the tiny 5% of funds that did beat the market do not do it consistently. In other words, picking a fund that beat the market last year does not mean it will beat the market in the coming years. • “…beating the market average (S&P 500) has proven to be impossible to accomplish over time”“Stop Sitting on Your Assets” by Marian Snow For Agent Training
  • For Agent Training
  • S&P 500 Note: $156,957 Same 11 years For Agent Training
  • Amazing • Start with $100,000 in Mutual Funds Minus the ups and downs of the market • End with $100,770 before fees and tax • Deduct Mutual Fund Fees of $32,361 • Net before tax $68,409 • Wait it can get worse… For Agent Training
  • 401K Fees Fees typically 1%-5% PLUS If money is taken and under age 59 1/2 take an additional 10% penalty tax If you miss the required min. distribution (RMD) 50% penalty tax For Agent Training
  • 401K Fees Most workers don't know about 401K fees, rebates and revenue-sharing agreements Most fees are buried in the fine print or not disclosed at all The U.S. Department of Labor lists 17 distinct 401(k) fees, including ones for record keeping, legal services and toll-free telephone numbers. Most common fees: Management fees, Administrative fee, Distribution fees (about 1% a year), Sales loads (averaging 1.4%) Trading costs (averaging .51% ) Excess capital gains taxes For Agent Training
  • “What the heck is the rate of return on a typical IUL policy?” You would have to get a 8 – 12% average annual return in a taxable account to equal the average net return in a typical and properly designed IUL assuming you’re in the 35% tax bracket. For Agent Training
  • 10.04% was the average indexed interest rate credited to ANICO IUL annual point to point segments that began 9/1/09 - 12/1/12. Past performance of the index is no guarantee of future performance
  • • • • • 14% Cap Rate1 100% Participation in Indexed Account Downside protection 3% Minimum Guaranteed on death or full surrender2 • Assuming no withdrawals, Accumulation Value will not decrease, even if an index declines • Plus Living Benefits - Critical, Chronic & Terminal3
  • Let me let you in on a great secret… One of the many advantages of a properly structured IUL-type policy is that you can borrow the equity (money) in your policy, use it to invest elsewhere, and your money in the policy continues growing as though you hadn’t touched a dime of it! (Note – not all companies offer this feature.) For Agent Training
  • Real Secret • Result: • You could be receiving the 8 – 12% after-tax equivalent return… • PLUS the return of the investment you put the money into! • This allows you to have your money working for you in two ways at the same time! For Agent Training
  • Bottom Line • The rate of return on an IUL will put just about any traditional investment to shame, and it will do that without the risk or volatility of stocks, real estate, gold, commodities and other investments. • And without the risk of taxes For Agent Training
  • Bryan Daly Founder Freedom Equity Group Thank You