“Rhett, Rhett? Where should I go? What should I do?”
These are the famous last words from the ending scene of Gone With the Wind, the film based on the Pulitzer Prize-winning novel by Margaret Mitchell that is credited with being the most-watched movie and the highest grossing film ever made. So what does this have to do with your investment money? Signs are on the horizon and market experts have predictions for the next three months that could seriously and directly impact your ability to retire the way you deserve. We just want to give you a heads up; the rest is up to you. There’s quite a bit of juicy gossip surrounding the making of Gone with the Wind. For example, actress Vivien Leigh supposedly didn’t enjoy kissing Clark Gable all that much – he wore dentures and they smelled. The latest talk about the stock market isn’t quite as juicy, but it’s relevant to anyone who is at or near the time of retirement. If you’ve got a significant amount of savings sitting at risk, here are three reasons why you should give a damn.REASON #1 The Reports
Bloomberg recently reported that the Goldman Sachs Group Inc. expects the S&P 500 and the STOXX Europe 600 to fall by about 10 percent by the end of the year. Their analysts are downgrading stocks for the next three months because, in their opinion, equities are at the limit of their “fat and flat” range.
They credit concerns about China, uncertainty in Europe, and the possibility of problems in Turkey as contributing factors.
REASON #2 The Election
We’ve also got ourselves a certain kind of election year: we are at the end of a president’s second term. Back in 2000 when Bill Clinton was finishing his second term, the market dropped by 41% to hit a November low. In August of 2008 when Bush was ending his second term, the market dropped by 48.4%.
Similar waterfall declines were also seen in the last year of a president’s second term during 1987 and 1929. Yes, the S&P 500 is currently up by about 4 percent, but just in the process of posting this article, all three indices have started to drop.
REASON #3 The Risk
If your portfolio suffers a significant loss during or close to the year that you retire, then you might run out of money. The Sequence of Returns is a mathematical phenomenon that shows us why taking a hit during your distribution years is totally different from taking a hit during your accumulation years. Market risk can have such a significant impact on retirees, FINRA recently re-issued an investor alert in June of 2016, Market Risk: What You Don’t Know Can Hurt You. It doesn’t matter how healthy your portfolio is on the day that you retire – if the market takes out a large enough bite, you might not make it for the long haul. Folks, there’s no clearer way to say this: Protect your retire
ment savings. You don’t have to move all of it out of the market, but if you are 10 years or less away from what you hope to be your golden years, then you want to TAKE STEPS NOW to protect what you’ve earned.
If you or someone you know has a significant amount of retirement money sitting in the stock market, please share this cautionary notice with them. If you have any questions, one of our financial experts would be more than happy to talk with you.
As always, we’re here to help. The market is poised to move – and we don’t mean up. Are you ready? Can you afford to lose any money in the market during the retirement phase of your life?
The choice is up to you…will your nest egg remain whole during the predicted volatility of the next three months, or will the money be . . . Gone with the Wind?
