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Peak to Trough
Written by Steve | Published: |
My family and I are just leaving from a beach vacation before the kiddos start school next week.
One of the best parts of swimming in the ocean is the ups and downs that the waves bring. Whether it is swimming, bodyboarding, boogie boarding or something else the quick rise and fall gives you that roller coaster feeling in your stomach.
While this up and down movement is fun in that form, it’s not so fun when it comes to the markets and your money.
If we have little dips here and there, no big deal right?
But what happens when the dips get deeper and the rises get smaller?
The markets got a little bit of a positive bounce this last week but not enough to pull us out of bear market territory.
I found an interesting chart this past week.
If you look at this chart called a “Peak-to-Trough” it shows where the markets started and where they ended in their respective downturn. The red line is where we are now. Approx just below a 20% decrease.
It’s a little busy but the end result is easy to follow. For example in 1973-74 and 2007-08 the market went from 100% down below 50% of its value.
There is a lot of speculation out there, but nobody has a crystal ball.
This is why the earlier you implement the Continuous Cash Flow method into your specific situation the more confident you are going to feel through these turbulent times.
If you are in the retirement danger zone right now this is vitally important that you take a solid look at your approach.
Since we don’t know what the future holds we want to implement a floor where your money can’t fall below, but at the same time we want to allow you to capture the gains when the market comes back.