When I was a kid my brothers and I loved to punish ourselves by eating the popular candy called “War Heads”. If any of you remember these, they were excruciatingly sour to start and then after about 20 seconds or so it would wear off and become sweet.
Something we would do for “fun” was put the next “War Head” in our mouths right before the sour-ness wore off to see who could keep a pucker face the longest. Yeah, I know we are weird and maybe a little bit light on the I.Q. scale. Ha ha.
This kind of reminds me of what we see many investors have done in the market. If you speak with most advisors whenever there is a market downturn, they say something like “well we could re-allocate your funds to something more conservative.” Which could be ok before a market downturn, but doing this near the bottom of a market crash really only limits the upside of the market recovery.
It’s kinda like holding a pucker face for as long as you can (but without the sweetness afterward). Last week I talked about losses and the recovery needed to earn back your principle.
I had some follow up questions from our community so I decided to make a short video to explain. In this video, called “Is Diversification Helping You???” it will bring a bit more clarity and show you what I mean with some simple numbers.
This is why I always like to make sure that my clients have money that is not correlated to the market, interest rate changes, political events, corporate corruption etc. When you can get wall street type returns outside of the market but never have a downside, it really throws gasoline on your wealth building fire.
And no we don’t do this through going to cash, CDs or anything like that. We use our proprietary Continuous Cash Flow Method. If you have questions about this, when you are ready, hop on my calendar and we will chat.
Remember — It’s Your Time…