I started out my illustrious career in the financial sector back in June of 1999. I just turned 22 and didn’t know a whole lot about economics, politics or the financial markets. But, if you know anything about me I’m eager to learn and my wife and I are self-help junkies.
What has happened in the markets over the past 20 years?
When I started out the market was booming. We had a tech boom. Everybody wanted in. I remember one of my 70-year-old CD clients wanted to buy the Munder Net Net Fund. He wanted more. He wanted the gains of the tech sector.
His 7% 1-year CD just wasn’t good enough.
In March of 2000 the Tech Bubble Burst!
That wasn’t so bad per say, the overall S&P was only down 9%, if you had a diversified portfolio you were okay.
September 11 hit America and you were down 50% very quickly. America rallied and so did your portfolio until…
The Accounting Scandals…
Then we rebounded until the 2008 housing bubble collapse. Again, our portfolios saw over a 50% drop from the top to the bottom.
We have seen the longest bull run in history. Nobody can ever call exactly when we will see a fall or the bottom, but we know it will be 50% plus drop when it hits.
The questions are…
Are you prepared?
How long will it take to recover?
What does it all mean to your retirement?
Is the market still worth it?
Yes and No!
During my 20-year illustrious career the Dow has increased 140%. That is an annual growth rate of only 4.44%.
What do you think is a reasonable return in the stock market?
Dave Ramsey’s expectation of 12%?
Keep in mind the Dow’s return was 4.44%!
These numbers do have a caveat, they don’t include dividends. Do you own dividend paying stocks? Dividends account for 70% of the total return of the market over time.
The question is are you prepared? Are you positioned for the upside? Are you protected from the downside?
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