Money - Your's - 2015 Year in Review - Protect Your Eggs

The keys to grow your money fast and keep it safe in your 401k & IRA.

Money – Your’s – 2015 Year in Review

Posted on Jan 7, 2016 in Blog |

2015 was NOT the best year for our money:

Large Cap Stocks (S&P 500) Down 0.69%

Small Cap Stocks (Russell 2000) Down 5.25%

Bonds Down 2.19%

Gold Down 11.06%

If we hold to average inflation rates we lost an additional 3.22% on our money on top of these losses.

Inflation, money
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Your Money

Our money, once diversified, will only grow as the Markets permit and this year was not the best year, the Markets were not in a giving mood. We look at the performance of the market this year then add in inflation the picture it is worse, top it off with fees we need to pay just to play the can add an additional loss of 1-3%. 2015 a year that we will need our money to make up.

And not to be a Debby Down (no offense to Debby) but 80% of our investment options in our 401(k)'s and IRA's under-perform the Market anyway. This would mean we can add even more to the downside this year for our money. Putting it all together this years is hard to stomach.

2000 to 2016

The hit we took in the wallet in the 2008 crash has caused many of American investors to be cautious and rightfully so. If you are not a little apprehensive about the investing world after two major market crash since the new millennium you might want to reconsider.  Even if you are in the camp of riding out the market downturns you can't be pleased with how your money  has performed over the last 16 years.

At the end of 2015 the Stock Market (S&P 500) is only up $588.72 or 40.46% from $1,455.22 to $2,043.94. This makes only an average grow of 2.53% pre-year, far underperforming the historical average of 10% a year that Financial Advisors say we should be getting.  At this point, we need to fully consider that the traditional method of buying and holding our investments will actually get us to our financial goals considering the next market crash could wipe out our 2.53% gains.

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OUTDATED?

The buy and hold investment strategy was distributed to the average American with the rise of the 401k that was replacing the pension in the late 1970's. For 30 years this strategy was sufficient but the world has changed and one should consider what other strategies are easily implemented with 401k and IRA's.

There is a fair argument to be made that the buy and hold strategy is altogether broken. However, we would just say it is outdated. It was created before the cell phone, flat screen, rise of China and India to the global market and perhaps most importantly the invention of the internet.  In the 1980's, to be a trader, one had to work on Wall Street, today one can trade from just about anywhere on any exchange; from Hong Kong to Londo to New York all from a cell phone with a mobile app.  It would be short-sighted say this hasn't changed the investing world.

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The largest problem facing the average American investor is that buy and hold has been so preached to us that it is the only safe way to invest that it would seem like a gigantic shift to even look for something different or, imagine, something better. The truth is we simply need a better investment strategy. There are many, but finding the right one that works for you is the key. . .

Join us at protectyoureggs.com to see if we can help you.