Record Dow has No Celebrations!
By Rachel Victoria, MSFS, former CFP
October 14, 2008
Yesterday, the Dow Jones Industrial Average had the largest one day gain in history, up 11% or 936 points! Yet, I heard very few investors celebrating. It's understandable that weary investors have very little cheery spirit left. Even after this major record setting gain, the Dow was still down 30% from it's level one year ago. Even more disheartening is the fact that after 10 years of a roller coaster ride up and down, the Dow is still very close to where it was ten years ago. Did you "get" that? Ten years later, there's almost no growth in the Dow! Wow........
Retirement planning is "supposed to" be a logical plan. It is "supposed to" involve funds that you can count on to be at a certain value at a certain time. It is "supposed to" follow a formula that will provide a consistent income at retirement. Therein lies the problem. No one believes that anymore. With frantic emotion, financial and bank failures, and the Big Bailout ruling the wild swings in the stock market, can you consider that a "retirement plan" or any kind of plan?
Challenging times call for Superior Strategies. To begin with, you need to stop losing your principal every 5-7 years. You need to eliminate the periods of 1-3 years sitting in down markets with no growth or income in your portfolio. And, you need to have consistent high yielding monthly income or growth in your portfolio to arrive at your retirement date on time or even early.
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