Monday, April 27, 2009

The “Paper Loss” Garbage

Majority of those who have investments in the stock market are freaking out – and rightly so. They are looking for answers as well as ways to halt further evaporation of their savings. In 2008, all the major stock market measures (S&P 500, DOW and NASDAQ) plunged well over 30 percent.

To bring this point home, a hypothetical nest egg valued at $500,000 on January 1, 2008 would have had a balance of $350,000 as of December 31, 2008 – assuming no withdrawals and that no fees were accessed on it. That is a reduction of $150,000 in one year!

And, it gets worse: As noted by USA Today, the average stock fund fell approximately 9.1 percent in the past three months. Are we at the bottom yet? When is the freefall going to end? Is this what millions of investors signed up for?

Called Your Adviser Lately?
I’m pretty sure you have been told by your financial adviser (if he/she invested your money in the stock market- with your consent), heard the experts say, or read this golden solution: “Your losses are only on paper - you’ll be okay.”

Here’s the truth, those losses are REAL. I repeat, every bit of your losses are REAL! You see, once you lose in the stock market’s game, that investment is – GET THIS - lost FOREVER. These - in my opinion – shady advisors/experts are twisting the fact.

When the market recovers (and I’m praying for that to happen ASAP), it is “NEW” gains! In effect, if you had not lost, you’d have ended up with new gains on top of your previous earnings – Theoretically speaking if you are already in the stock market.

If these financial advisors are right (about the “paper loss” thing) then investing is like a big joke. Where, sometimes, your fund company shows you $350,000 instead of your previous $500,000 balance. Something tells me the only reason you see the lower value is because that’s your ACTUAL, LEGAL value.

Could You Have Avoided These “Paper Losses”?
Whether investors knew to ask or not, they needed to know the answer to THIS question: Is there a strategy that can get me decent returns when the stock market is positive and protect my account values so I don’t lose a DIME when the market declines? A qualified advisor should have been addressing this question all along.

As I indicated in my recent interview with the Frederick News Post, the answer is YES! That’s exactly what our firm has been teaching, recommending, and implementing for clients. I can tell you this much: They are NOT tormented by the safety of their investments. You may learn more by attending our next seminar or requesting a complimentary consultation or webinar.

1 comment:

  1. we need more and more professionals like you. keep teaching us the common-sense which for years the "establishment" has managed to keep away from us.


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