52 Weeks to Prosperous Living
Follow us!
  • Home
  • E-book
  • Prosper SBS
  • Products
  • News/Articles
  • Sign Up!
  • Quotes
  • Contact Us
  • ToDo Lists

Truth About Risk

2/7/2012

0 Comments

 
Truth is truth, no matter how much we try to fight it..   There doesn’t exist this idea of “your truth” and “my truth”.  Truth is independent of us as individuals, groups, society norms, and opinions.  How we utilize and apply truth is the individual part. 

I want to share three truths about risk in investments.  How you apply them is your call, I’m just sharing.

The first thing we need to accept is that both good days and bad days in the market are highly impactful on our portfolios.  Often we only worry about the best days.  This is dangerous.  If you had $1 invested in the S&P from 1928 to 2010, it would have a cumulative return of $73.21.  If you would have missed the 10 worst days over that time period, your cumulative value would have been $228.71.  That’s quite a difference! 

The second thing we need to accept as truth is that average return is not equal to actual return.  Those down swings have an impact on our portfolios that aren’t often talked about.  Think about it.  If you have $100 and you loose 50% in year one, but gain 50% in year two, your average return is 0%.  You broke even, right?  Wrong!  You have an actual return of -25% and you have only $75 dollars.  Funny they don’t clarify that more often.  Protection from those losses will do a lot more for your portfolio than an extra percent or two of returns will in the good years.

Third, and a truth that we all know but sometimes forget, is the truth of inflation.

Inflation marches on and will always be a part of our lives.  Putting our retirement nest eggs in almost zero paying bank accounts will actually cause losses to our purchasing power over time.  We can’t afford to sit on our money or put under a mattress or we are guaranteed losses.

There are safe money alternatives that follow these truths, protect from downside risk and provide great returns along the way.  They continue to improve and more and more people are enjoying the idea that “the truth shall set you free” in retirement.
-Ed Kinsey-
0 Comments



Leave a Reply.

    RSS Feed

    E-mail Questions to [email protected]

    Marc & Ed

    We are a couple of insurance agents that want to help people.

    Crazy... we know!!! 
    Insurance Agents that actually want to help.  Sounds like a joke, right?  :-) 

    We noticed that most people we came in contact with do not have their finances in order and know nothing about insurance or what is out there.  We want to educate you and help you.  Please help us... help you.  If we don't hear from you... we wont know how to help. 

    Marc & Ed

    Categories

    All
    Advisors
    Comments
    Company Highlight
    Contact Us
    Discounts
    Food Storage
    Funny
    Health Insurance
    Homeowners Insurance
    HSA's
    Ira Taxes
    I U L
    Life Insurance
    Misc.
    Newsletter Article
    Organization
    Passwords
    Personal Budget
    Property And Casualty Insurance
    Protection
    Risk
    Saving
    Tax Free Retirement
    Todo Lists
    Utah High Winds
    Week 1
    Week 10
    Week 11
    Week 12
    Week 13
    Week 14
    Week 15
    Week 16
    Week 17
    Week 18
    Week 19
    Week 2
    Week 20
    Week 21
    Week 22
    Week 23
    Week 25
    Week 29
    Week 3
    Week 4
    Week 6
    Week 7
    Week 8
    Week 9
    What Age Can I Retire

Powered by Create your own unique website with customizable templates.
Photos used under Creative Commons from Saad Faruque, Ran Yaniv Hartstein, Gregory Moine, NathanF, Fairy Heart ♥, bibliojojo, mikepetrucci, _e.t, markhillary, eliazar, nitram242, qf8, fallingwater123, Gastev, Christoph Lorenz Photography, B Rosen, || UggBoy♥UggGirl || PHOTO || WORLD || TRAVEL ||, Son of Groucho, Images_of_Money, sidibousaid60, GYLo, Michal Osmenda, misteraitch, Materials Aart, The U.S. Army, skippyjon, C. G. P. Grey, Mike Licht, NotionsCapital.com, State Farm, Don Hankins, InterContinental Hong Kong, bonnie-brown, 401(K) 2012, Beyond Elements, weeklydig, DonkeyHotey, Alex E. Proimos, NRMA New Cars, Fabio Bruna, mullica, hoyasmeg, kthypryn, Big Blue Ocean, SpaceShoe [Learning to live with the crisis], Mike Licht, NotionsCapital.com, peteSwede, j.reed, wodejia_g, neurmadic aesthetic, _Dinkel_, NathanF, Franco Folini, jjankechu, Davide Vosti, StewC, eric731, fsgm, Martin Pettitt, Jo Naylor, EvelynGiggles, Images_of_Money, out of ideas, Images_of_Money, louis konstantinou, OakleyOriginals