🎬 Welcome to TriathlonPartnersTV! In this episode, we explain the Point-to-Point Investment Strategy. This simple yet powerful strategy links your returns to the performance of the S&P 500 index. The Point-to-Point strategy offers lower risk than investing directly in the S&P 500 because it guarantees no loss, called the floor, even if the S&P 500 goes down. In exchange for this protection, there is a limit on how much you can earn each year, called the cap. Thanks to its protection and potential for growth, this strategy is common in products like index annuities and indexed universal life insurance.
🔑 Key Features of the Point-to-Point Strategy:
- Downside Protection: This feature protects your investments. Even if the market falls, you won’t lose money.
- Potential for Growth: In return for downside protection, your earnings are capped each year. While this cap limits gains in strong markets, it still allows for above-average returns in many cases.
✨ Why the Point-to-Point Strategy is Excellent:
- Market Exposure with Protection: You can grow your money while limiting losses, making this great for cautious investors.
- Downside Risk Mitigation: The built-in floor ensures protection during market downturns, acting as a safety net in uncertain times.
- Participation in Equity Growth: You still benefit from market gains when the S&P 500 rises, allowing your investment to grow.
- Lower Volatility: The combination of the cap and floor makes your results more predictable. The strategy has less risk but still delivers returns. Plus, tax-deferred earnings and tax-free withdrawals (in properly structured life insurance) can boost your after-tax yield. The result is returns similar to the S&P 500 but with half the volatility.
At TriathlonPartnersTV, we aim to engage, educate, and empower you to make smart financial decisions for your retirement. We also want to thank our amazing S.T.U.F.F. community—Subscribers, Thumbs Up supporters, Followers, and Friends!
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Additional Resources
Mastering Retirement: The Secret to a Balanced Portfolio
TriathlonPartnersTV: Annuities, RILA s & Tax-Deferred Growth
TriathlonPartnersTV: Retirement Annuity
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