Throughout the stock market’s history, it has always been volatile, in many cases roller-coaster-like, sometimes nausea-inducing, and even causing some people to literally jump off buildings. If you’ve studied the market at all, you have seen it going up, going down, going back up, going back down, going back up again, and then going through the entire nerve-wracking, anxiety-causing cycle over and over. The stock market is at an all-time high, and it’s a lot easier and far more fun to focus on potential big gains than it is to dwell negatively on big potential losses.
I am a very optimistic and positive guy. Someone could tell me the sun is never going to come up again, and I will say thank goodness because I really love looking at the stars and the moon! But right now, when it comes to the stock market, I have a whole different attitude. I have been in the financial industry for 37 years, and right now, I am very worried, very, very worried, that the stock market being at all time high is more of a harbinger of doom than it is of continued limitless growth. I am more afraid of the stock market now, and what bad things could happen, then at any time in my career. You might want to take notice. And I am not afraid for myself, I have protected my assets against large stock market losses. I am afraid for you.
Why do I feel so afraid for retirees and people about to retire? It’s because I have seen what happens to people who didn’t protect their assets when the stock market has crashed. In 1987 I saw the stock market crash -23% in a single day, and if retirees didn’t protect their portfolios, they lost a lot, and they felt terrible. I watched the stock market crash -50% during the Technology Bubble between 2000-2002, and retirees who didn’t protect their assets lost -50% or more, and felt lost. I then witnessed the stock market recover by 2007 and then crash -50% again when the 2008 Financial Crisis devastated the entire global economy, with retirees who were unprotected losing up to -70% of their asset values, feeling like their retirement was just ruined. So, color me jaded, simply because I have seen the devastation stock market crashes cause unprotected portfolios.
So, What Are The Actual FACTS About Stock Market Crashes?
Since 1929, the stock market has had 13 major bear market crashes that have averaged -39.5% losses.
While 13 stock market crashes since 1929 doesn’t sound like that many crashes, it means historically, the stock market has crashed and lost an average of -39.5% every 7 years. The overwhelming vast majority of retirees and people about to retire do not have the stomach to go through a -39.5% loss today, then another -39.5% loss again seven (7) years from now, then another -39.5% loss again 14 years from now, and then another -39.5% loss again 21 years from now. Do you have the stomach for this?
This Information Is Important For Four (4) Reasons:
#1 – You don’t have enough time to make up for a big loss, and you definitely don’t have enough time to make up for multiple big losses.
#2 – Because as of July 2019, the stock market has been in the longest bull stock market run in history, for 10+ years. This means we are 3 years overdue for the next average -39.5% loss.
#3 – Your Beautiful Pie-Chart Portfolio, that you thought and were told was diversified and didn’t have much risk, probably has a lot more risk than you thought. If you have what is considered by many as a conservative portfolio, made up of 10, 20, or 30 mutual funds that are 70% stock funds and 30% bond funds, if we have another 2008 type stock market crash, you very well could be sitting on a -39.5% or larger potential loss.
#4 – It means if you are between 55-75, based on history, you most likely will go through multiple -39.5% losses in your lifetime:
55-year old couple will go through 5 more -39.5% losses in their lifetime.
60-year old couple can expect 4 more -39.5% losses in their lifetime.
65-year old couples can expect 4 more -39.5% losses in their lifetime.
70-year old couple could see 3 more -39.5% losses in their lifetime.
75-year old couple is projected to see 2 more -39.5% losses in their lifetime.
80-year old couple is projected to see 2 more -39.5% losses in their lifetime.
You need to make sure this doesn’t happen to you.
Keep your money safe out there!
None of the material in this presentation is intended to give you specific tax, investment, real estate, legal, estate, retirement, or financial advice, but rather to serve as an educational platform to deliver information; nor is it intended to show you how the strategies presented can specifically apply to your own tax, investment, estate, financial, or retirement position, but rather to offer an idea of how these principles generally may apply. This data is furnished with the understanding that the authors and publishers are not engaged in rendering you legal, real estate, accounting, estate, investment, tax, financial, retirement, or other professional advice or services through this presentation. None of the material in this presentation is intended as a solicitation for you to buy or sell any financial product. Nothing is directly or indirectly guaranteed by this presentation. A fixed index annuity with an income rider can protect your savings from losses and provide you guaranteed lifetime income, but you could incur surrender charges, gains aren’t guaranteed, you’ll pay a fee, and guarantees are backed by the financial strength and claims paying ability of the issuing annuity company. Any investment in stocks, bonds, or mutual funds can lose principal, even with a stop loss, and there are no guarantees of gains. All investments involve risk and investment recommendations will not always be profitable. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund a new portfolio and/or annuity may have tax consequences, early withdrawal penalties, or other costs and penalties as a result of the sale or liquidation. You cannot invest directly into a stock market index. Illustrations, projections, and hypothetical examples are used to explain concepts and are not indicative of potential results you could receive; past performance is no guarantee of future results; and results are not indicative of any particular investment or income tax situation; your results will be different and could be lower or higher. Insurance product features and benefits, such as guaranteed lifetime income riders, are subject to contract terms, limitations, fees, and the claims paying ability of the insurance company issuing the contract. Consult with a qualified investment, tax, legal, and/or retirement advisor before making any decisions.
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Investment Advisor Representative of and Advisory Services offered through Fiduciary Solutions, LLC, a Registered Investment Advisor. Peak Financial Freedom Group, LLC and Fiduciary Solutions, LLC are affiliated entities. Peak Financial Freedom Group provides no Advisory Services. Insurance products and services provided by independent agents. Jim Files CA Insurance License #0F06511 & Dan Ahmad CA Insurance License #0732913