It’s not what you make, it’s what you keep

There is a very important reason that Warren Buffett’s first rule of investing (“Don’t Lose Money”) is also the second rule: it can take a lot of gain to make up for losses.

In the chart below are a few of the worst years in the history of our stock market.

The most recent was in 2008 when the S&P 500 index lost 57% of its value.

Look on the chart.

Find -60% on the bottom and then move up over the green % to see the gain required just to get back to breakeven. That’s right, it would take a gain of 150%! So if the long term average return in the market is 9-10% how long will it take? Sometimes it has taken YEARS!

So what is Wall Street’s answer?

If you’ve ever received investment advice then you’ve more than likely been presented with a colorful pie chart recommending that by diversifying and holding your investments for an extended period of time you should expect good results.

That works OK when the markets are doing well, but what about when the market goes down? Like it did in 2008.

How do you protect yourself during those times?

If you understand the laws of nature then you know that when things become unbalanced they eventually adjust back to a norm.

So know this about the law of averages….

The stock market has dropped 20% or more (“bear market”) on average once every 3.5 years. This is an average that has held true for the recorded history of our stock market.

Basically when the balloon gets too full of air it has to pop. It may not pop when you think it’s going to pop, but it WILL pop.

According to Ned Davis research the average drop is over 35% and has lasted on average close to 300 days (last column in the chart below).

Take a moment now and do the math for yourself.

If your portfolio lost over 1/3 of its value how would that change your life?

In retirement you can’t go back and earn it again.

Are you at a point in your thinking couplelife where the amount you have invested is much   larger and more significant?

Retired or getting close to retirement? This is where it becomes even more important than ever to keep from losing your nest egg!

Well this can be scary because you really can’t afford to lose money.

You don’t have time on your side to go back and earn it again and you are now relying heavily on it. It has to last you for the rest of your life!

The good news is that there are solutions

If you’d like to discuss your options you can reach us
HERE for a complimentary conversation.

If this sounds anything like YOU then you’ve come to the right place.
I want you to know you don’t have to worry anymore. There is a solution.

  • One that you will easily understand because it is based on common sense.
  • One that is liquid and doesn’t restrict or tie up your money.
  • One that is based on a systematic process and not on guess work or hunches.
  • One with some history where the roots of this process date back to the early 1900’s.
  • One that is an effective, time tested, repeatable process.
  • One that is both disciplined, dynamic and most importantly, defensive.

Whether you are still working towards retirement or now retired we all need our investments to continue to grow just to keep pace with the cost of living.

As a retired person taking income from your portfolio you will need additional growth just to replace what you are taking out.

We are not going to get that kind of growth from sitting in the bank so we need to look to the markets for those returns. And therein lies the rub!

We need the higher return, but hammockhow do we do that and protect ourselves from the risk?

There will be details to follow, but for now just imagine your life without fear of the markets knowing that your portfolio is managed to help protect you.

Click HERE for your FREE report

3D-Cover_John-Carlson_How Do I Protect My Portfolio