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howindex
1. How Indexing Works
Directly Investing in the NASDAQ Composite through a Stock Brokerage Firm
Compared to
Indexing the NASDAQ Composite through an Insurance Company
1/1/2000 — 12/31/2012
January 1, 2000
Both Strategies
Start with Equal
$500,000
Balances
Which result would you rather have?
The choice is up to you!
Insurance Company
Indexing
$1,038,283 Balance
200% Gain
Wall Street
Direct Investing
$255,574 Balance
50% Loss
■ Direct Investment Incurs 100% of All Losses and Earns 100% of All Gains
■ Indexing Incurs Zero Losses and Earns the First 12% of All Gains
Source: finance.yahoo.com Assumptions: Net of fees, taxes, and new contributions