Safe Money Management

Do you want a sure thing or a maybe?

Everybody loves to see their money grow, but how much risk should you take? A short history lesson may help you decide.

The S&P 500 index is one of the most commonly used indices in the financial world. There are index mutual funds, index annuities, and even index Universal life insurance policies. How has the S&P 500 index (and the actual stocks that make up the index) performed in modern times? Since 1968, the index has had positive results 35 out of 46 years at an average gain of 15.58% and an average loss of 15.78% in 11 years out of 46.

However, if we look at the last 15 years, the story is somewhat different. Eleven years showed positive average gains of 14.142%, but the losing years were -21.45%. While the ratio of winning years to losing years is close (1968-2013 66.09% winners vs. 23.91% losers; 1999-2013 63.33% winners vs. 26.67% losers), the actual percentage gain decreased by 9.23%, while the average loss increased by 35.93%!

These are indeed treacherous times in the financial markets! Fortunately, there are ways to take advantage of market gains while mitigating the downside risk. Remember 2008? The S&P 500 index lost 39.23%. Yikes!

You have worked your entire life to accumulate the wealth you have now. People take risks to get what you have. By contrast, all you need to do now is keep the money that you already have.

Contact Steve

Let’s talk about safe money management. Call 856-428-3353 or use the contact form to schedule a no-obligation appointment today.