Mike's Blog: Your Quest for Financial Peace of Mind

Current Articles | RSS Feed RSS Feed

Successful Investors Know Gains Follow Losses

  
  
  
  
  
  

 

After a bunch of summer fun, it’s time to get back to work and help you with some successful investor insights. Just in time, right? 

But some housekeeping first:  Remember that you are receiving this newsletter because you requested it.  If you want to unsubscribe, then please just hit this link at the bottom of the page.

_________________

For those of us who follow economic science, we feast on times like these.  These portfolios are purposefully designed to have a see-saw effect so that, as much as possible, one portfolio asset is down while another portfolio asset is up in any market event.  Scientifically -designed portfolios are rebalanced consistently, so it consistently sells high and buys low (relatively speaking), and it accumulates shares by doing so.

Scientifically -designed portfolios are designed to take advantage of times like these, and you can have one too , whether inside your 401k (TSP) or outside it. Ask to have a conversation with me if you want to learn more.

What can you learn about investing from the past two weeks?  Just this: The biggest losses in the markets often are followed by the largest gains in the markets

What a wild ride we were on: the stock market went down 500 points, up 400 points, then down 600 points, then up, and up, and up until everyone making predictions is confused. Even wilder is what happened during any one of those days as the market gyrated up and down. Yet, by the end of the week, the market was down just 1.5%, which is unremarkable.  

Uh-oh … As I write these words on Thursday, August 18 @ 2:58 pm EDST, the DJIA is down 443 points!  Are we going on this ride again?!  Yes we are, Virginia, yes we are.  But you don’t have to be afraid of it.

 -------------------

Mark my words; sometime soon a big day will occur to balance today’s loss.  It’s going to happen.  That’s just the way it works, folks, big losses are followed by big gains .  Sometimes those big gains erase the loss, and sometimes they don’t.  But gains do follow losses in similar ways. 

To see this historical fact, hit the link below and note how often the same week is on both sides of the Biggest Stock Market Gains And Losses chart provided by the Wall Street Journal:

  http://online.wsj.com/mdc/public/page/2_3047-djia_alltime.html

 -------------------

  We are here to give you the knowledge and confidence you need to have the success you want!

 Have a great weekend!

 Mike

Comments

There are no comments on this article.
Comments have been closed for this article.