Archive for March, 2012

Why Stock Market Returns Matter, But Not for the Reasons You Probably Thought

I’ve been known to quote stock market returns from a Compound Annual Growth Rate (geometric mean) point of view.  This calculation takes into account the effect time has on a rate of return and is wildly more useful than simply looking at average rate of return (usually quoted as the arithmetic mean). But any good […]


Allan vs. Pam: Bank on Yourself

Spring is here, time to enjoy warmer days (if you’re with me in the Northeast), blooming flours, and a fight between a so called financial educator who hustles a selling system to insurance agents known as Bank on Yourself and a fee based financial planner who is pretending to be a consumer/journalist.  Here’s the story. […]


Indexing In Monte Carlo

Now that we know the basics of indexing, we can dive into a much more interesting topic: Does it work?  We’re going to use a hypothetical contract (it’s actually a real contract from which I have borrowed heavily, but we won’t name names) where there is a minimum interest rate of 2% per year and […]


The Indexed Approach

For several decades insurance companies have been using an approach to determining credited interest rate that is known as indexing.  It’s a practice that has had it’s detractors (yours truly for a little while) and has been a method that has been used for good an evil by well educated and unscrupulous agents respectively.  Today […]


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