RISKS: How can I reduce the losses as I get closer to retirement? Should I get out of the market altogether or hang in there hoping I can catch back up? What should I do?????
First thing is not to panic. Let’s look at what has happened in the past, what is happening now, and ways to reduce your risks in the future while still potentially earning.
Is that possible? YES and there are two other HUGE benefits as well.
This first chart shows the results of the S&P 500 over the last 10 years. As you can see, it was at 1294 and today, after some pretty wild swings, we are at about 1926. Now as a disclaimer, we can’t predict future performance on past history, and this is in no way to be financial investment advice. I am not a registered representative, and do not want to mislead anyone.
Now then, you can do the math and see that over the last 10 years, the market has grown about 48%, (1926-1294=632. Then 632/1294=.488 x 100 and you get about 48%) and if you average that out, it is about 4-5% per year. So, if you had started you retirement planning back then, you would be doing ok. Not hitting it out of the park, but just ok.