RETIREMENT PLANNING & ANNUITIES

Understanding the Indexing Strategy

An indexing strategy has two key components: a CAP or limit as to how much you can earn when the market is good, and a protective floor of ZERO when the market is not good. How is this different from the S&P 500 Index mutual fund? The S&P 500 mutual fund spreads investments evenly between 500 different stock companies. There’s no cap on gains, so you keep what it returns when the market is good, but when the market cycles down, you suffer the losses because there is no floor.

The chart below is based on actual credited rates from 1998 to 2014. It shows how $100,000 would have performed had it been invested in the S&P 500 mutual fund and an Indexed Annuity using our indexing strategy.

With the Insurance Indexing Strategy, you are protected when the market loses money due to a fixed zero floor. Preventing loss is one of the main components of our strategy.