Debate Settler #1: Investments vs Insurance arguments on LinkedIn

The “conversations” between the insurance and investment sides of the industry are the same thing over and over. I think we can settle this now. 1. We all agree “stocks” will be higher than insurance cash values over the long run 2. We all agree stocks will be much more volatile than cash values Investment folks dwell on #1. Insurance folks dwell on #2. What’s the right answer? There’s never one right answer. But my answer is: 1. Don’t put money in volatile investments you need to access soon. 2. If you don’t need to access your volatile investments soon, then ignore the volatility (Volatility is necessary ingredient of higher returns. Volatility is a byproduct of uncertainty and uncertainty is what creates the opportunity for higher returns.) Investments and insurance are tools that do a job. Use the right tool for the right job. Most of these arguments come from arguing about using the wrong tool for the wrong job. | 27 comments on LinkedIn