Retirement losses and recovery

Steve & Ted
Wednesday, December 27th

How much does it take to recover from a stock market loss?


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Russian media reports its Dick in a gale force winds have blown a woman off her balcony. On the Pacific island of Sakhalin. The Interfax news agency reported the woman went out for a smoke on the balcony and was pulled off landing on a slow drip billow. An ambulance. Couldn't reach the house with a woman had to be taken to a hospital in the bucket of a construction track but some out of a movie and a local news website says. She fell from the fourth floor booking an apartment three ribs cool. And leaving her with a concussion. Cycle and is in Russia's Far East has been hit with a series of snowstorms. With wind gusts reaching 93. Miles for a building it snows there he goes out and would not be around now and it it. Light up McKay who lines up and it's no grip with a broken ribs went out. Employees of a Waffle House restaurant have received a huge tip. Of over 3500 dollars from Ohio church goers. Whose pastor preached about generosity. At Christmas. And giving away the church coffers the daily Dayton daily news and WH I OTB reports five women working at the while a company into the restaurant were stunned when congregants from grand lake United Methodist Church delivered the surprise tipped on Christmas Eve. While the workers the restaurant were told that it's but the money amounted to over 700 dollars apiece. Ted you know I worked on Christmas Day. And agency anybody give it to show up to help us with the beat that new rule. He just take it progress there going to be here. Are the city. I why don't we have a lawful house in Wichita. US that a while a while that's less immune to Waffle House that have signed into -- house of may have been totally museum down there that actually they are classic. I mean there an iconic we were we were in the gulf that I tea every you can look down the road and like every half mile you don't see a Waffle House. Really gather like Starbucks you know. They're good to have around like it if you're hungry like at 1:30 in the morning like the club and have love and go to law. I mean we don't have we don't have I don't think there's one of the state of Kansas. Now. We can do some research it find out if there is. They were just not that well I think there's a franchise opportunity for yeah. For somebody I can't believe there's not 147 south and via the turnpike there what you saw about where they would be. I'm Cindy great location run up the turnpike. So this guy's good he's got a plan. Its business plan announced that hotel brand looked by the hour and a pretty Waffle House. Advantages. Did it about 651 now Stephen did. Retirement losses in recovery done grant CFP the money tracker with us this morning is always towards farewell you know it seems. Antithetical reasoning but if you're new to us may antithetical OK you know like he'd like it's not. Good reasonable okay yeah I should've just said it seems like not good reasoning. For me it anyway. Quite a bit think about this for a second if you lose 50% of any thing. It takes 100%. Gain. Of whatever is left to make him whole again. OK okay you know you lose fifty bucks and it whenever I see it anyway with they 101000 dollars in your brokerage account a loss of 50% leaves you with 5000 bucks. Where your investment. To get back to us. Two 101000 box you're gonna need W five K that's requiring a 100%. Gain to get it back. And now have one more to invest. In all of the 500 stock holdings of the entire S&P 500 at the same concentrations. And had 101000 dollars invested there on January 1 of 2008. When the recession. Hit in the market dipped 37%. That year. Stocks dipped to about 6300. At that a point right now where 124000. There the market did recover. And had the investors stayed invested in that exact same thing it did get back to the 101000 dollars in fifteen months. In February of 2012. OK so it took four years. The amount in the account would have recovered to 101000 box recover results were calculated. On 712 portfolio dot com. Now there is a mathematical formulate to cac calculate the amount of return it takes to recover from a loss snapped repeating it is not good radio. I but especially your driving you know and it generated dammit here are some examples of a loss of 5%. It takes five point 3% to recover. 10% would take eleven point 1% to get back 30% loss takes 42 point 9% gain and so law. Now since the stock market is a moving target it's impossible to ever predict how long the recovery will take. According to 712 portfolio dot com from 1980 through 2016. There were 433. Rolling twelve month periods you know every month you can look back twelve months. Well too had returns of greater than 53%. And and lots of numbers but there was a 75%. Chance that a loss of 20%. Can report be recovered in a three year period 36 months. OK got that. Remember past performance will not dictate future returns but there is historical precedents that a diversified Portillo portfolio could. Help mitigate losses and speed up recovery. Historically a multi asset diversified portfolio that includes stocks bonds real estate and commodities. Was less. It has less opportunity to lose value. Then a concentration in just S&P 500 stocks there is a historical 2% chance. That'd diversified portfolio. Will lose. 20%. In any twelve month period. The S&P 500 has a 5% chance for 20% loss in any given twelve month period so it's. This did a good argument for diversification to diversification. Can be a good security strategy but does not guarantee of course against losses and of course every questions about this I know gets complicated sorry threats in the numbers when you drive and but to even give me called number 63422. Point to a lot of numbers and yet numbers yet. So did you. You receive a gift that you need to take back to replace or. No but I received a glass. A gift of some some beer tasting glasses that you one of them broke. Really and it was through Amazon and so we're gonna somehow get that taken care of that now. Now didn't didn't receive any thing that I need to take back so you were taken a great big drink in your so inebriated compelled that I fell down a crash it gets quite a minority I don't think Ashley is my forehead of a mightily too much year pro yet you you are no it was in the box broken into yet. But that's story's not as good as Steve yeah now nasty might have been much are better it's it is kind of a fake news story there it is yeah well that's what you deal with a thank you gentlemen it is all right 55 even did coming up. Is this morning at 7 o'clock all of today's news including. Story about the mayor. Saying that stuff which are working to hire more officers that story more news coming up at seven seemed intent on tape and assess.