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Case Upon - Investing - Seniors - Beware of Buy and Hold Investing
Arkansas is a very diverse state. You have a lot of things going on for this state. The state has a lot to offer to visitors, travelers and even for entrepreneurs. You can see in the state a lot of opportunities for outdoor adventures such as cavern or cave tours and a lot of mountain trails and scenic routes to hike, walk and drive.And for entrepreneurs, the state opens up a lot of opportunities. Arkansas is rich with small towns that lure not only travelers but can be an investor's new base of business as we
The second point is to make sure this ‘floor’ rises as the value of your portfolio rises. If your portfolio goes up 15%, you’ll want your floor to increase 15%, too. This will help you lock in your gains along the way.
If the value of your portfolio approaches your ‘floor’, determine why. Then sell the investments that are the cause of the drop and reallocate that money somewhere else, based on your situation, risk tolerance and what’s going on in the market and economy.
Find out more about the dangers of the Buy and Hold strategy of investing and the steps you can take to protect yourself by visiting www.guardingyourwealth.com or by calling 1-877-827-1463.
Mr. Voudrie is a Certified Financial Planner and President of
I am probably a bit slow on the uptake of this but it is something that really hadn't interested me until not too long ago when I started to hear things about that some people are going to ask me some advice on how to use eBay to their advantage. I'm not just talking about the average Joe that wants to have an auction I'm talking about someone who wants to make money out of it, just like a normal online store.So it wasn't until today that I set out to discover if eBay could really be more then just an auction
For years we’ve been told that the only safe way to invest in the stock market is to ‘Buy’ quality stocks or mutual funds and ‘Hold’ them for the long-term. This strategy may work well for someone in their twenties or thirties, but it has the potential to severely impact those in or near retirement who depend on their nest egg for income.
Barry retired at age 55 with a healthy $750,000 nest egg. That would have been more than enough to provide for him and his wife, allow them to travel and to live their retirement dreams for the rest of their lives. Unfortunately, Barry made the mistake of following the advice of his previous broker who touted the Buy and Hold strategy of investing (B&H).
You see, B&H says that there isn’t any way to ‘time the market’. It also says that if you are not invested for even a handful of days over a 10 year period, that it can significantly reduce your return. Therefore, it’s reasoned, you should stay invested and just ‘weather’ the difficult periods when the market declines in value. “It will come back, just hang in there,” its proponents argue.
This defies common sense. It’s like telling one of my daughters to wear her bathing suit all winter and to stay outside by the swimming pool, because the hot weather will come back next year!
Barry found this out the hard way. After 3 years of staying out in the cold his $750,000 retirement savings were only worth $350,000. His and his wife’s dreams of traveling and enjoying a comfortable retirement were gone. He has been forced to go back to work, hoping to retire again in 4 years.
The reason that B&H doesn’t work well for seniors is because it assumes you have the time to recover from a severe market downturn. But few realize the implications of this belief.
For instance, if you invested $100,000 in the S&P 500 index on January 3, 2000 it would only be worth $62,626 on December 31, 2002, three years later. That’s a loss of almost 38%. “But hang in there,” the B&H strategist says. “It will come back.”
Well, let’s look at that. Assuming a constant 10% annual return, it would take an investor almost 5 years to recover what was lost. A constant 7% annual return would require 7 years to reach $100,000.
So the B&H investor would have to forgo any income or use of that money for 8-10 years and still would only have their original investment! Are you willing to leave your money untouched for 8-10 years and come away with the same amount you put in? I doubt it. That’s why the B&H strategy can be dangerous.
I believe strongly in investing in the stock market. Even someone who is retired should have a portion of their money protected against rising prices—something the stock market does well. It is vital, though, that seniors employ certain safeguards.
To keep from repeating Barry’s mistake, you need to determine the maximum amount you are comfortable losing. For instance, if you are investing $100,000 perhaps you set a ‘floor’ at $90,000. If your portfolio declines in value to the floor amount, you take action. That way you know you only have 10% of your portfolio at risk
The second point is to make sure this ‘floor’ rises as the value of your portfolio rises. If your portfolio goes up 15%, you’ll want your floor to increase 15%, too. This will help you lock in your gains along the way.
If the value of your portfolio approaches your ‘floor’, determine why. Then sell the investments that are the cause of the drop and reallocate that money somewhere else, based on your situation, risk tolerance and what’s going on in the market and economy.
Find out more about the dangers of the Buy and Hold strategy of investing and the steps you can take to protect yourself by visiting www.guardingyourwealth.com or by calling 1-877-827-1463.
Mr. Voudrie is a Certified Financial Planner and President of
For most of the small business owners I work with, marketing has become the equivalent of a four-letter word. Inevitably, when I ask the question, "Do you have a marketing plan?" or "What marketing activities do you engage in?" I get the full gamut of responses from the proverbial deer in the headlights stare, to a vociferous, "I hate marketing, it's the least favorite part of my business!"After years of witnessing this reaction, and learning a bit about modern marketing, I'm starting to understand why traditi
You see, B&H says that there isn’t any way to ‘time the market’. It also says that if you are not invested for even a handful of days over a 10 year period, that it can significantly reduce your return. Therefore, it’s reasoned, you should stay invested and just ‘weather’ the difficult periods when the market declines in value. “It will come back, just hang in there,” its proponents argue.
This defies common sense. It’s like telling one of my daughters to wear her bathing suit all winter and to stay outside by the swimming pool, because the hot weather will come back next year!
Barry found this out the hard way. After 3 years of staying out in the cold his $750,000 retirement savings were only worth $350,000. His and his wife’s dreams of traveling and enjoying a comfortable retirement were gone. He has been forced to go back to work, hoping to retire again in 4 years.
The reason that B&H doesn’t work well for seniors is because it assumes you have the time to recover from a severe market downturn. But few realize the implications of this belief.
For instance, if you invested $100,000 in the S&P 500 index on January 3, 2000 it would only be worth $62,626 on December 31, 2002, three years later. That’s a loss of almost 38%. “But hang in there,” the B&H strategist says. “It will come back.”
Well, let’s look at that. Assuming a constant 10% annual return, it would take an investor almost 5 years to recover what was lost. A constant 7% annual return would require 7 years to reach $100,000.
So the B&H investor would have to forgo any income or use of that money for 8-10 years and still would only have their original investment! Are you willing to leave your money untouched for 8-10 years and come away with the same amount you put in? I doubt it. That’s why the B&H strategy can be dangerous.
I believe strongly in investing in the stock market. Even someone who is retired should have a portion of their money protected against rising prices—something the stock market does well. It is vital, though, that seniors employ certain safeguards.
To keep from repeating Barry’s mistake, you need to determine the maximum amount you are comfortable losing. For instance, if you are investing $100,000 perhaps you set a ‘floor’ at $90,000. If your portfolio declines in value to the floor amount, you take action. That way you know you only have 10% of your portfolio at risk
The second point is to make sure this ‘floor’ rises as the value of your portfolio rises. If your portfolio goes up 15%, you’ll want your floor to increase 15%, too. This will help you lock in your gains along the way.
If the value of your portfolio approaches your ‘floor’, determine why. Then sell the investments that are the cause of the drop and reallocate that money somewhere else, based on your situation, risk tolerance and what’s going on in the market and economy.
Find out more about the dangers of the Buy and Hold strategy of investing and the steps you can take to protect yourself by visiting www.guardingyourwealth.com or by calling 1-877-827-1463.
Mr. Voudrie is a Certified Financial Planner and President of
Have you ever felt like your career is going nowhere? Perhaps your job was once very fulfilling, and you had this dream that you were on your way to the top. You kept climbing the ladder and it seemed you were on the right track, and then suddenly, something pulled the ladder out from under you. You came crashing to the ground. You felt hurt, bruised, ticked off, even downright mad. You were afraid that life was going to pass you by. Now crazy thoughts fill your head. You are afraid that you may lose your house
The reason that B&H doesn’t work well for seniors is because it assumes you have the time to recover from a severe market downturn. But few realize the implications of this belief.
For instance, if you invested $100,000 in the S&P 500 index on January 3, 2000 it would only be worth $62,626 on December 31, 2002, three years later. That’s a loss of almost 38%. “But hang in there,” the B&H strategist says. “It will come back.”
Well, let’s look at that. Assuming a constant 10% annual return, it would take an investor almost 5 years to recover what was lost. A constant 7% annual return would require 7 years to reach $100,000.
So the B&H investor would have to forgo any income or use of that money for 8-10 years and still would only have their original investment! Are you willing to leave your money untouched for 8-10 years and come away with the same amount you put in? I doubt it. That’s why the B&H strategy can be dangerous.
I believe strongly in investing in the stock market. Even someone who is retired should have a portion of their money protected against rising prices—something the stock market does well. It is vital, though, that seniors employ certain safeguards.
To keep from repeating Barry’s mistake, you need to determine the maximum amount you are comfortable losing. For instance, if you are investing $100,000 perhaps you set a ‘floor’ at $90,000. If your portfolio declines in value to the floor amount, you take action. That way you know you only have 10% of your portfolio at risk
The second point is to make sure this ‘floor’ rises as the value of your portfolio rises. If your portfolio goes up 15%, you’ll want your floor to increase 15%, too. This will help you lock in your gains along the way.
If the value of your portfolio approaches your ‘floor’, determine why. Then sell the investments that are the cause of the drop and reallocate that money somewhere else, based on your situation, risk tolerance and what’s going on in the market and economy.
Find out more about the dangers of the Buy and Hold strategy of investing and the steps you can take to protect yourself by visiting www.guardingyourwealth.com or by calling 1-877-827-1463.
Mr. Voudrie is a Certified Financial Planner and President of
Allergies and Asthma are a common concern for families today considering pets, my family included. However, there are some animals available that are hypo-allergenic. This DOES NOT mean that that they are non-allergenic. Hypo-allergenic simply means that they produce fewer allergens, and people with slight to medium strength allergies may be fine with these pets. People with severe asthma and allergies may still have allergic reactions when around pets. In this case, you are better off looking for a pet that is entir
I believe strongly in investing in the stock market. Even someone who is retired should have a portion of their money protected against rising prices—something the stock market does well. It is vital, though, that seniors employ certain safeguards.
To keep from repeating Barry’s mistake, you need to determine the maximum amount you are comfortable losing. For instance, if you are investing $100,000 perhaps you set a ‘floor’ at $90,000. If your portfolio declines in value to the floor amount, you take action. That way you know you only have 10% of your portfolio at risk
The second point is to make sure this ‘floor’ rises as the value of your portfolio rises. If your portfolio goes up 15%, you’ll want your floor to increase 15%, too. This will help you lock in your gains along the way.
If the value of your portfolio approaches your ‘floor’, determine why. Then sell the investments that are the cause of the drop and reallocate that money somewhere else, based on your situation, risk tolerance and what’s going on in the market and economy.
Find out more about the dangers of the Buy and Hold strategy of investing and the steps you can take to protect yourself by visiting www.guardingyourwealth.com or by calling 1-877-827-1463.
Mr. Voudrie is a Certified Financial Planner and President of
The following article presents the very latest information on how to learn Forex. If you have a particular interest in learn Forex, then this informative article is required reading.There are several ways to learn forex, the term that stands for foreign exchange. The best is through full-time educational programs that teach the working of forex markets. Another way is through forex books. However, this is a time consuming method, and the individual has to spend hours to dig out relevant information. There is a
The second point is to make sure this ‘floor’ rises as the value of your portfolio rises. If your portfolio goes up 15%, you’ll want your floor to increase 15%, too. This will help you lock in your gains along the way.
If the value of your portfolio approaches your ‘floor’, determine why. Then sell the investments that are the cause of the drop and reallocate that money somewhere else, based on your situation, risk tolerance and what’s going on in the market and economy.
Find out more about the dangers of the Buy and Hold strategy of investing and the steps you can take to protect yourself by visiting www.guardingyourwealth.com or by calling 1-877-827-1463.
Mr. Voudrie is a Certified Financial Planner and President of Legacy Planning Group, Inc., a Private Wealth Management Firm in Johnson City, TN.
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