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Historically, investing in the stock
market has provided above average returns relative to bonds
and cash. However, several studies have shown that most
individuals and even professional money managers who
invest in stocks and equity mutual funds have been unable to
consistently achieve market returns.
Most investors look to the equity markets
with the assumption that their investment is safe if they
are willing to stay for the long-term. But how long is long
enough?
No one knows what the future holds, but
it is important to bear in mind the uncertainty concerning
stock market performance. The bear market of 1973-1974 wiped
out all of the spectacular gains of the 1960’s and took the market back to 1961 levels.
S&P 500
The stock market crash of 1929 wiped out
all of the gains of the previous 33 years. An investment at
the top of the market in 1929 had to be held until 1954
before showing a hint of profit (after adjusting for
inflation).
The market has a history of registering
many marvelous up years, but has also suffered through some
breathtaking down years. This unpredictable behavior is
expected to continue. Adding to the unpredictability of the
market is the fact that any change in expectations will
cause emotional up and down movements in the market.
As a society, we have placed our faith,
hope and dreams in the upward movement of the stock market.
We have stored our pensions and retirement accounts there,
along with our children’s college education funds and most
of our life savings.
As investors, we have experienced the
jubilation of a roaring bull market and the horrible carnage
wrought by a grisly bear market, accompanied by colorful
corporate scandals.
If unprotected against loss, an
investment in the market exposes your
principal to potential losses. Just like gambling at a
casino, a fortunate few will walk away winners while many of
the players lose.
The simple realization that the market
can move dramatically and unpredictably both up and down
calls for an investment plan that takes all measures
possible to protect against the risk of loss while allowing
for upside participation.
Progressive Financial
focuses on the return of your investment as well as the return on your investment. We offer
simple and safe solutions for survival in the perpetual high-risk environment of stock market investing!
Don't let your investments go up in smoke!
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