2016 to Be ‘Cataclysmic’ Year for Investors, Here’s What to Do | Get News
ga('create', 'UA-47275228-1', 'getnews.info');
ga('send', 'pageview');
Home
Business
Lifestyle
Health & Medicine
Technology
Financial Market
U.S.
World
Home » Business, Financial Market, Personal Finance, Stock Market News » 2016 to Be ‘Cataclysmic’ Year for Investors, Here’s What to Do
2016 to Be ‘Cataclysmic’ Year for Investors, Here’s What to Do
Posted by admin on February 17, 2016
RUIDOSO, NM – 17 Feb, 2016 – A drop in stocks wiped out $1 trillion in January. The World Bank predicted markets are headed for the “perfect storm.” It all reinforces the need for comprehensive retirement income planning and the importance of understanding certain factors just over the horizon.
“Sell everything except high quality bonds. The New Year will be cataclysmic for investors and the world is in a global recession.”
The breathless remarks are not what someone wants to hear at the start of 2016 (or at any time for that matter), but it’s part of the finding of a recent report from The Royal bank of Scotland, and it’s sending shudders through financial markets.
The investing giant compares the current market environment to that of 2008 just prior to the collapse of Lehman Brothers, and it’s hard to argue with their logic.
A sharp drop in stocks wiped out $1 trillion in value in the first two weeks of January alone. The World Bank predicted global markets are headed for a “perfect storm,” and billionaire investor George Soros joined RBS in comparing current economic conditions to 2008. Nominally, the Dow Jones Industrial Average, a basket of 30 top stocks, lost 2.2 percent in 2015 alone, while the broader S&P 500 fell 0.7 percent (+1.38 percent with dividends), the worst performance seen since 2008 and the end of three straight years of double-digit gains.
“We think investors should be afraid,” the report bluntly concludes.
Its central recommendation, “sell everything except high quality bonds,” would appear to contradict conventional wisdom in the wake of the last downturn. Many financial professionals criticized investor behavior then, which saw massive selloffs in a global panic that locked in losses and limited participation in the massive rebound that followed. The Dow Jones Industrial Average hit a low in March 2009 of 6,547.05 before topping out again at 18,288.63 in March 2015. Had the public simply “stayed the course,” they argue, the devastation coming out of the last recession wouldn’t have been nearly so severe.
It’s all about timing. The devastation to which they refer includes damage inflicted by retiring when markets are down. Known as sequence-of-return risk, its effects can be the difference in achieving an affordable quality of life in retirement. Sequence-of-return risk is the risk of further compounding investment losses in down markets due to the withdrawal of accumulated assets for living expenses, which erodes savings exponentially and increases the possibility that retirees will outlive the proceeds in their portfolio.
The Journal of Financial Planning reports that the first six years of retirement are crucial to savings longevity. Experience too many “off” years during that period, and the investor will most likely not recover.
All of this reinforces the need for comprehensive retirement income planning and the importance of including sequence-of-return risk and similar variables from the outset, according to financial advisors.
“We’ve experienced a correction at the beginning of the year and it’s not over yet,” says advisor Brian Mirau, founder and president of Ruidoso, New Mexico-based Mirau Capital Management. “The stage is set for another 2008, and we’re already seeing the beginning of it. The market was overpriced and is still overpriced. Yet, with everything that’s happening, volatility doesn’t have to have a major impact on the investor’s portfolio.”
Mirau is capitalizing on technology to help. His “Retirement Analyzer” offering, which he provides free of charge, includes just about every possible factor that could negatively affect a retirement plan. In addition to age, gender, portfolio value and the more obvious variables, it also accounts for any pensions the investor might have, Social Security, cost-of-living adjustments, inflation, estimated rates-of-return, the aforementioned sequence-of-return risk and the possibility of major market corrections in the run-up to, and while in, retirement. It then recommends safe money strategies and products that can aid in smoothing returns, and thus income, in times of high volatility like those currently seen.
The key to avoiding market turbulence and lessening its impact, say financial advisors, is to expect that it will happen and actively plan for it when developing retirement income strategies. If balanced correctly, its impact can be negligible, despite cataclysmic predictions and panicked markets.
For more information about us, please visit http://MirauCapital.com
Media Contact
Company Name: Mirau Capital Management, Inc.
Contact Person: Brian Mirau
Email: BMirau@MadisonReps.com
Phone: 888-668-9327
Country: United States
Website: http://MirauCapital.com
Comments are closed.
Buzz
Twitter
Facebook
RSS
Email
Advertisement
Recent Posts
Beneleaf Expands, Offers Sparkle Studded Tiaras for All Occasions
LifeSkills Training Protects Teens from Prescription Opioid Abuse
TridentTech Trading takes military water cans market by storm
Premiere real estate developers in Dubai brings luxury and style!
eSign Genie Announces Enhancements that Increase Customer Convenience
Damage Restoration Company in Baltimore Now Offers Full Scale Services
2016 to Be ‘Cataclysmic’ Year for Investors, Here’s What to Do
Custom Gold Grillz Launches Brand New Product
Click & Rent Offers Topnotch Holiday Let Management Services
Over And Above Media Launch Affordable Aerial Photography And Videography In North East Of England
Legal Experts Explain How Emotional Distress Can Amount To Personal Injury
North America Car DVR Market Worth Will Be $180 Billion By 2022: Brisk Insights
Khojindya Teaches Consumers How To Score Big Online
Gokhoj Releases Fashion Shopping Tips For All To See
Looking For Education Opportunities In India – SearchAllIndia Can Help!
Zoltan Andrejkovics announces a new book, The Invisible Game that reveals the secret behind the success of eSports players
Lansing, MI Law Firm Announces the Launch of Their New Website and Legal Blog at CriminalLawMichigan.com
Small Businesses: Why Should Your Customers Choose You?
SolicitorAdvice.com Offers OBLIGATION-FREE LEGAL ADVICE Online
SolicitorAdvice.com Shares Tips For Finding A Medical Negligence Solicitor
Home
Djfeed
Copyright © 2016 Get News. All rights reserved.
The post 2016 to Be ‘Cataclysmic’ Year for Investors, Here’s What to Do appeared first on Press Release Rocket.