It is important that the impact that a bear market has to understand. On your capital The give and take of your investment capital is not equal. If
you placed $ 100 in an investment and 50% fell to $ 50, which is the
yield you would need to earn your original investment of $ 100 back?
Needed
Once you lose money, it takes a much greater return on the resources you have to retake your original investment. In this case you would need a 100% gain on the remaining $ 50 to retake your original $ 100 investment.
Looking at historic bear markets in the United States, we can conclude that the time to recovery of a bear market between six months and twenty-five years! Declines in the value of the portfolio have ranged from 20% to 86.7%! Do not buy a good scenario and hold investors. This is why you financially better to never lose money in a year and only achieve half the efficiency of the market in the positive years would be off. Let us explain how this is possible. If you've never lost money in the market down years, you would only need to 38.33% of the profits to capture the positive market years a buy-and-hold position in the Nasdaq 100 index equal. More realistically, if you lose in the market were down years, half of the losses Nasdaq, you would only need to 63.37% of the Nasdaq gains capture the positive market years a buy-and-hold score level.
The point we make is that you do not need to match the performance of market or exceed the positive market years if you are in the market to protect your capital. Downward years Protecting your capital in the market has an exponential effect on the growth of your capital over time. Downward years
The purpose of a stock market timing strategy should be to reduce risks and maximize returns - with the main risk factor. All other things being equal, you want to invest in the least volatile, highest reward, lowest risk strategy possible.
You can read this today because you tired of giving all your equity or assets of your customer, get in a bear market. You may change. Plans even in the position where your pension is reduced to the point of having your pension
Whatever the reason, there are better ways to grow and protect your wealth than the buy and hold (buy and hope) myth promoted by Wall Street.
Copyright 2006 Equitrend, Inc.
Once you lose money, it takes a much greater return on the resources you have to retake your original investment. In this case you would need a 100% gain on the remaining $ 50 to retake your original $ 100 investment.
Looking at historic bear markets in the United States, we can conclude that the time to recovery of a bear market between six months and twenty-five years! Declines in the value of the portfolio have ranged from 20% to 86.7%! Do not buy a good scenario and hold investors. This is why you financially better to never lose money in a year and only achieve half the efficiency of the market in the positive years would be off. Let us explain how this is possible. If you've never lost money in the market down years, you would only need to 38.33% of the profits to capture the positive market years a buy-and-hold position in the Nasdaq 100 index equal. More realistically, if you lose in the market were down years, half of the losses Nasdaq, you would only need to 63.37% of the Nasdaq gains capture the positive market years a buy-and-hold score level.
The point we make is that you do not need to match the performance of market or exceed the positive market years if you are in the market to protect your capital. Downward years Protecting your capital in the market has an exponential effect on the growth of your capital over time. Downward years
The purpose of a stock market timing strategy should be to reduce risks and maximize returns - with the main risk factor. All other things being equal, you want to invest in the least volatile, highest reward, lowest risk strategy possible.
You can read this today because you tired of giving all your equity or assets of your customer, get in a bear market. You may change. Plans even in the position where your pension is reduced to the point of having your pension
Whatever the reason, there are better ways to grow and protect your wealth than the buy and hold (buy and hope) myth promoted by Wall Street.
Copyright 2006 Equitrend, Inc.
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