A Simple Truth

Most people believe they have to take on risk in order to enjoy a financially secure future. Instead, we've discovered A Simple Truth: It is far more important to avoid large losses in your portfolio than to chase high returns usually associated with higher risk.

Consider the impact of the asymmetry of gains and losses in the following chart:


Potential                     Gain
Portfolio                     Required to
Investment                 Get Back to
Loss                            Even

-10%                           +11%
-20%                           +25%
-30%                           +43%
-40%                           +67%
-50%                           +100%

 

The bear markets of 2001 and 2008 were not supposed to happen with close frequency...yet they did, and many newly minted retirees had to try to return to the workforce. At Stewardship Advisory Group, we are keenly aware of the market cycle when making recommendations.  Bear markets can be likened to hurricanes…we may not get one every year, but the smart money is prepared for when one does hit.  When appropriate, we use Tactical Managers who play good Defense as well as good Offense.

Don Purcell is an Investment Advisor Representative offering Financial Planning and Investment Advisory services through Stewardship Advisory Group, LLC; an SEC Registered Investment Advisor. *Legacy Coaching services are offered through Stewardship Legacy Coaching, LLC. Securities are offered through United Planners Financial Services, a Limited Partnership, Member FINRA, SIPC.-  Stewardship Advisory Group, LLC and Stewardship Legacy Coaching, LLC are not affiliated with United Planners Financial Services.

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