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Thursday, September 3, 2009

Zero is my Hero!

No, I am not thinking about the old "School House Rock Video". Many folks have lost up to 50% of the value in their current 401k or other qualified plan. Where is the guarantee? What insurance or protection does one have when the market tumbles? Should we just buy more shares in case the market turns upward? What written guarantees are available if does NOT happen?
These questions should be asked at the time of the investment account inception. The problem is this: Folks are sold on the "what if". What if the market does 20%? The average investor can not time the market to earn 20%! The average investor during the 1900s earned about 2-5% when the market was booming? Why? Lack of knowledge in the science of Market timing. There are investors out there who are accumulating wealth and NOT losing money! They will get a 0% ROI on their money when the market goes down! They never lose their principle! That is more important than ROI! So ZERO IS A HERO in a down market! When the market goes up, they still can earn an Excellent ROI on their money! This video below explains it all.

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