You been told to ride out the #stockmarket, to stay invested, and losses will be easy to recover from. But, how much did you lose in 2000-2002 and 2007-2009 when the stock market crashed?
Many people lost 50 percent. Mathematically if you lose 50 percent you need to make a 100 percent recovery just to break even. That means, if your one million dollar I-R-A loses 50 percent a 50 percent gain brings you back to only 750,000 dollars, far short of full recovery. Your 500,000 dollar I-R-A value, after a 50 percent loss, would need a 100 percent gain to recover. That could take a long time, if it happens at all. If you lose 40 percent you need a 67 percent gain to recover, lose 30 percent … a 43 percent gain to recover, lose 20 percent … a 25 percent gain to recover... all difficult to achieve.
Our Golden Rule Of 5 percent to 10 percent states you can’t afford to lose more than 5 percent up to a maximum of 10 percent, in retirement, even if the stock market crashes 50 percent. If you want to learn how to use the Golden Rule of 5 percent to 10 percent in your portfolio, contact us today.
VIP Financial
www.vipfinancials.com
402.547.0395
Financial Advisor Parker Colorado
Estate Planning