The Bull Market Survival Guide
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The Bull Market Survival Guide By Dr. Richard Smith
“Buy and hold” investors like to brag about their returns. But there’s one thing they never mention. Recently, Jack Bogle, the retired CEO of Vanguard and chief buy and hold evangelist, went so far as to suggest that investors shouldn’t even look at their monthly account statements. “…when you get your retirement plan statement every month, don’t open it. Don’t peek,” he said. “It’s the market return that’s going to be your best investment for a lifetime.” Jack conveniently forgets what happened in 2008. Unfortunately, many real people remember it. And not fondly. Their lives were dramatically changed – to the tune of $16.4 trillion in lost household wealth at the bottom of the Great Recession. I’ve talked to many people who have similar stories. They were about to retire and the stock market dropped 50% or more. Their retirement portfolios were devastated. Their dreams became nightmares.
They were confronted with making a choice between having to work much longer than they originally planned or lowering their standard of living. Millions of Americans were forced to some hard decisions. And if you aren’t managing risk intelligently, you might be facing those same choices the next time the market crashes. And there will be a next time. Over the past 60 years, the largest drop in the Dow Jones Industrial Average (DJIA) was 53.8%. That happened less than 9 years ago. But that was hardly the only large drop that the market experienced. Even ignoring the 90% drop of the 1929 Crash at the outset of the Great Depression, there have been several drops of 50%. Each horizontal gridline in the log-scaled chart of the DJIA below represents a drop (or gain) of 50%. It makes it easy to see that there have been 5 drops of nearly 50% in the DJIA going back to the 1960’s… nearly once per decade.
And we haven’t had a major correction in over 9 years now.
An 8% loss vs. a 50% loss.
So how can you protect yourself from being another victim? Intelligent risk management using my system, that’s how!
Would your retirement portfolio have been devastated by losing 8%? Would your lifestyle have changed by losing 8%? Probably not. You would have lost money, but your dreams would have remained intact.
You saw that the largest drop in the DJIA in the last 60+ years was more than 50%. What if, on the other hand, you had used my system to limit your downside in the markets? What’s the largest drop using my system during the last 60 years? Only 20.8%. And that was over 30 years ago. During the financial crisis of 2008, the loss was only 8%.
Buy and hold investors are going to suffer more shocks in the near future. Controlling your risk is the only way you can be successful in preparing for retirement and managing your portfolio during retirement. Refuse to take large losses that will damage your investment results. And achieve your goals.
The Bull Market Survival Guide By Dr. Richard Smith
“Buy and hold” investors like to brag about their returns. But there’s one thing they never mention. Recently, Jack Bogle, the retired CEO of Vanguard and chief buy and hold evangelist, went so far as to suggest that investors shouldn’t even look at their monthly account statements. “…when you get your retirement plan statement every month, don’t open it. Don’t peek,” he said. “It’s the market return that’s going to be your best investment for a lifetime.” Jack conveniently forgets what happened in 2008. Unfortunately, many real people remember it. And not fondly. Their lives were dramatically changed – to the tune of $16.4 trillion in lost household wealth at the bottom of the Great Recession. I’ve talked to many people who have similar stories. They were about to retire and the stock market dropped 50% or more. Their retirement portfolios were devastated. Their dreams became nightmares.
They were confronted with making a choice between having to work much longer than they originally planned or lowering their standard of living. Millions of Americans were forced to some hard decisions. And if you aren’t managing risk intelligently, you might be facing those same choices the next time the market crashes. And there will be a next time. Over the past 60 years, the largest drop in the Dow Jones Industrial Average (DJIA) was 53.8%. That happened less than 9 years ago. But that was hardly the only large drop that the market experienced. Even ignoring the 90% drop of the 1929 Crash at the outset of the Great Depression, there have been several drops of 50%. Each horizontal gridline in the log-scaled chart of the DJIA below represents a drop (or gain) of 50%. It makes it easy to see that there have been 5 drops of nearly 50% in the DJIA going back to the 1960’s… nearly once per decade.
And we haven’t had a major correction in over 9 years now.
An 8% loss vs. a 50% loss.
So how can you protect yourself from being another victim? Intelligent risk management using my system, that’s how!
Would your retirement portfolio have been devastated by losing 8%? Would your lifestyle have changed by losing 8%? Probably not. You would have lost money, but your dreams would have remained intact.
You saw that the largest drop in the DJIA in the last 60+ years was more than 50%. What if, on the other hand, you had used my system to limit your downside in the markets? What’s the largest drop using my system during the last 60 years? Only 20.8%. And that was over 30 years ago. During the financial crisis of 2008, the loss was only 8%.
Buy and hold investors are going to suffer more shocks in the near future. Controlling your risk is the only way you can be successful in preparing for retirement and managing your portfolio during retirement. Refuse to take large losses that will damage your investment results. And achieve your goals.
