/ Category: After getting home from work on Friday and having time to lament on the day with the Dow dropping over 200 points it really gave me an unsettling feeling. For the past eight years the Dow has hovered between 11,700 all the way up to 14,000. That means that if you would have invested all your hard earned retirement money (from say, your 401-K) the money would have gone up and down over the past eight years with you earning virtually nothing in gains. While you might have been so lucky to sell when it was high and buy back when it was low (less than 1.5% chance of that working) then you would have suffered over eight years of inflation with virtually no gains. This is the same as running on the treadmill for an hour. You would have burned six hundred calories but would have gotten no further than your living room. This is one of the reasons for active asset allocation. It allows a person to re-balance their portfolios if the assets get out of alignment. For most of the people that I see they are living in a state of constant fear and scarcity. This, I would guess, comes from not having a plan or having a system to depend on. In the past eight years it also exemplifies the difference between growth and accumulation and distribution and protection. For many years I have observed some financial advisors and companies that continually use the old saying “Don’t worry about the markets, they will always come back”. That saying is fine when you are in your 20s or your 30s but when you get into your 60s or 70s the problem is you are fighting against inflation and taxes. If the markets don’t increase for eight years and there is still inflation, what is a retired person to do? If your goal is to live your retirement dream…how can you do that if you don’t see the money outperforming inflation and taxes? Is this part of what leads to the retirement depression? It could be as many people wait to see what happens to the stock market on a day to day basis and their entire mood is affected by what the stock markets do. I have a suggestion: Read Lee Eisenbergs “The Number” You can review it at TheNumberBook.Com This book will help you understand what the actual amount of return is that you need order to survive. If you like this book comment on this post.
Tags: Annuity Income, Asset Allocation, Conservative Investments, financial advisor, Income for Retirement, Income Investments, Investment for Income, Investment for Retirement, Retirement, Retirement Income, Retirement Investing, Tax
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