Market Recovery Program
It's legal, it works, and it's guaranteed!
Chapter 1
THREE CHOICES
I lost a significant portion of my equity holdings in the downturn of 2008. As you suggested in the Introduction, my #1 concern is: “How do I get my money back?” I actually lie awake at night worrying about my 401(k): when will I be able to retire? Will I be able to retire? I want my money back! Now! And I need to know what course of action to take to get my money back…
Generally speaking, there are three courses of action you can take (or some combination of all three):
The first is: stay in equities. Either:
1) do nothing and keep the position or positions you’re in that experienced the loss and hope that those stock and mutual fund prices get back to where they were before the crash; or
2) stay in equities but reposition into other stocks and mutual funds…and, again, hope their performance brings your portfolio value back to where it was pre-downturn.
But if I stay in equities, don’t I run the risk of losing even more of my money?
Yes.
Staying in equities means that the value can be further eroded. That’s simply the nature of the equities beast: potential for great gains as well as the risk of losing some or all of what you currently have.
Why do you think every stock broker or financial advisor you open an account with has you sign a disclaimer acknowledging that “you can lose some or all of the money you invest” and that “past performance is not an indicator of future performance”?
What’s my second option?
The other end of the investment spectrum: fixed strategies: Take some or all of your money out of equities and put it in, say, an interest-bearing savings account at the bank. Or a bond, CD, or Money Market. Anything you place your money in which the principal is guaranteed and where the issuing financial institution will periodically declare guaranteed interest rates is a fixed investment. Eventually and most certainty, your money will compound until you’re back to what you started with.
But interest rates are at an historic all-time low. I can only imagine how long will it take to get back to where I started from using fixed instruments.
That, of course, is the downside of going the fixed route. Depending upon how much you lost, it could take more time than you reasonably have left to live…and I assume that you want to start using your recovered losses as soon as possible.
Yes!
As we’ll soon see, prevailing low interest rates almost certainly excludes the fixed strategy as a viable option…unless, of course, they discover that longevity DNA gene and we all end up living to 150.
The first two options don’t seem to provide much hope.
There is a third choice: Reposition some or all of what’s left from your losses into a strategy with the specific goal of recovering losses and returning your investments back to their original pre-downturn level. That’s the Market Recovery Program and that’s the subject of this book.
But before we can even hope to make any kind of informed decision, there are other essentials to examine first. I consider them prerequisites to any course of action you ultimately decide to take.
The first one has to do with where we feel the market is heading…
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