Page 159 - Ready Set Retire

Ready. Set. Retire!

Protection from Stock Market Losses

One main issue today’s retirees have is losses in the market.
Many have called the first decade of the 21st Century the “Lost
Decade.” If you had held your money just in the S&P 500 from
January 1, 2001 until the end of 2010, you would have averaged
a -3.1% average return on your money, for a LOSS of 31%
over that 10 year period! That is not supposed to happen in
long-term stock market investing!

But with the markets at all-time highs, isn’t this all moot? Well,
think of it this way. On January 3, 2000 the Dow Jones closed
at 11,357. At today’s close (April 2017), it closed at over 20,000;
a near-record high. That means in the ensuing 15 year period
you had an annual return of 2.99% per year! Now net your fees
out of that.

But somehow people never believe me when I show them
these figures...after all it goes against everything they “know.”
One favorite saying is by the slave Jim in Huck Finn: “It ain't
what we don't know that gives us trouble, it's what we know
for certain that just ain't so.”

Ben Franklin is reputed to have once said (so is Einstein, and
Thomas Jefferson, and I believe, Kermit the Frog…heck, I say
it regularly!), “The definition of insanity is doing the same thing
over and over again and expecting different results.” It doesn’t

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