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It’s not how much you make – It’s how much you keep!

When you continually hear this quote come out of my mouth,  I am sure it gets old and a bit stale. I promise you though, that this is the truth, the whole truth and nothing but the truth!

As we look back on this severe downturn in the economy and market, the questions of what started it and what fueled it are pretty easy to answer, Greed and Fear. When you look back at our newsletters, market updates, and more recently my Blog, it should be comforting to know that we saw this coming and really did respond by taking chips off the table. This is the only way you can lose less than the market when panic takes all assets for an elevator ride down. So, when we say that our four portfolio’s were down between -25% and -42% from the top of the market to the bottom (10-10-07 to 03-09-09), we can say that we kept more of your assets than the -55% return of the average stock index over the same time period.

The math is pretty extraordinary, as you can see below:

% Loss% Gain to Recapture Loss
-25%+33%
-30%+43%
-35%+54%
-40%+67%
-45%+81%
-50%+100%
-55%+123%
-60%+150%
-65%+185%
-70%+233%
-75%+300%
-80%+400%

 

It takes a lot less time to make 33% to 67% return than it does to make a 123% return!

Keep the faith!

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