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HEADLINE: This Recession Has Been Bad
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1st Quarter 2009 Market Review Video
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Examine Your Retirement Plan’s Stable Value Fund Closely
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Does your advisor put your interests first?
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The Financial Plan – Why it is Important to Limit Loss

HEADLINE: This Recession Has Been Bad

The Recession has been bad

Above is a chart that compares the S&P 500 earnings performance during the current economic recession (the red line) to that of the tech bubble recession (the gold line) and the average recession dating back to 1936 (the blue line). As you might expect, the current decline in earnings has been significantly worse than during the average recession, and is now worse than during the bursting of the tech bubble.

Note that earnings bottom out and start to improve near the 18 month mark during both the average recession and during the recession of 2001-2002. How far into the current …

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1st Quarter 2009 Market Review Video

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Examine Your Retirement Plan’s Stable Value Fund Closely

retirement funds over timeMany employer-sponsored tax-deferred retirement plans, including 401(k)s, offer a unique investment option called a “stable value” fund. If you’ve invested in such a fund, you should take a close look at what’s inside – its value might not be as stable as you think.

For years, I’ve had some of the money in a 401(k) plan with my former employer invested in something called the “fixed income fund.” The fund documents describe it as a conservative cash-like investment with a $1.00/share price.  Over the years, the fund has always yielded more than a money market fund; its current yield is …

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The Financial Plan – Why it is Important to Limit Loss

The Pain to Gain Ratio

  • If you lose 5% of your portfolio, it takes a gain of 5.3% to get back to even.
  • If you lose 20% of your portfolio, it takes a gain of 25% to get back to even.
  • If you lose 50% of your portfolio, it takes a gain of 100% to get back to even.
  • If you lose 90% of your portfolio, it takes a gain of 900% to get back to even.

Conclusion: If you limit your losses, the road back to prosperity is much easier. Work with your financial advisor to develop an investment

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