Monday, September 26, 2011

Last week's DOW plunge: A Lesson in Common Sense

Last week's DOW plunge: A lesson in common sense
NOTE: Today, I’m taking a little detour from the Financial Fiction Series to discuss the current happenings in the stock market. I hope to continue with the series next week.

This past week has been a nightmare for some (not all) retirement investors. Sadly, though, that number of investors in distress happens to be in the overwhelming majority. Personally, as someone who has been helping scores of hardworking Americans plan successfully for their golden years, my feelings are mixed about this ordeal – sad on the one hand, yet believing this should be an “Aha!” moment for the majority of retirement investors.
My Sympathetic Side

I’m saddened and feel the pain, so to speak, for those who are enduring this ordeal. They woke up Monday, September 19, with the Dow Jones Industrial Average (DOW) at 11,401. Then they went about their usual weekly routines, and by the end of the work week on Friday, September 23, the very same DOW had plummeted to 10,771.48. That’s a 5.5 percent decrease, decline, and loss of their hard-earned nest eggs – in just a week! That translates into a $100,000 nest egg on Monday having decreased to $94,478.38 by Friday, just like that.
I know there are some who brush this off as trivial because, as they always say, “Of course you’ll make it all back in a matter of time.” Really?
That’s complete baloney, because none of those investors who lost money this past week will ever make that money back! Such a thing has never happened since the beginning of time and will never happen, because that’s just not how investing in the stock market works. These investors may make NEW gains to reach the same totals they had before the plunge, but the money they lost is GONE, never to be recovered.
The other very important thing investors must understand and not take lightly is that whenever they lose money this way – in the stock market – they have lost that percentage of their entire life’s savings (all their principal, plus all the gains they have made up until that point in time). You might want to let that last point sink in for a moment.
This must be an “AHA!” moment

We financial professionals are highly skilled and educated ( or at least we’re supposed to be), but this statement by the late Robert Green Ingersoll also is true:
It is a thousand times better to have common sense without education than to have education without common sense.
Common sense tells us that there are only two possible directions for the stock market: up, when you can make an unlimited amount of money, OR down, in which case you can lose everything – including your seed money. Is there any other direction I’m missing here? Of course not!

So, if you want the certainty of enjoying your retirement one day (or right now), you probably don’t belong IN the stock market game. My clients – and I mean all of them – decided not to play in the market. Instead, their nest eggs are growing every single year, including those years that the market plummets, and they certainly enjoy night after night of tranquil sleep, regardless of which direction the DOW and the S&P 500 go. That means that they will not have to delay their retirements, or if they are already retired, endure any decreases in their investment incomes.

Media reports and our everyday encounters lead us to believe – wrongly – that we are all in the same boat when it comes to investing our nest eggs: that we all lose money together and make money together. That couldn’t be further from reality – just talk to any Laser Financial Group client. 

It’s YOUR retirement and YOUR common sense, so use it!
Contact a financial professional at Laser Financial Group TODAY for a confidential, complimentary assessment of your nest-egg so that you can determine whether getting out of the direct line of the market's volatility may be right for you. 877.656.9111 or 

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