So…is It Too Late To Sell?
No. Not too late. Most everything remains on sell signals.
One of the reasons I say this is because it’s harder to recover with negative numbers than positive numbers.
Avoid losses whenever possible!
Look, you tell me which is better:
Harry’s money grew at 8% in year one, then losing 4%, then losing 9%, then making 23% in the fourth year.
or
Larry’s money grew at 8% in year one, then 6%, then 3%, then 23% over 4 years…
Well? Not much difference…the returns in years one and four are identical for Larry and Harry. The only difference is small gains or losses in years two and three.
Just plug in actual numbers and see for yourself. Use a nice round number like $100,000:
Harry: $100,000 became $116,049.02 (about 4%/year). But, with Larry: $100,000 grew to $145,034.71 in 4 years.
That’s a difference of nearly $30,000. In fact, Larry made an average of just over 11% per year…but notice: there’s only ONE year where Larry made double-digit gains in the four years — but Larry did not sustain losses.
Again, it’s harder to recover with negative numbers than positive numbers. Avoid losses whenever possible!
Look, if you’ve got questions about ANYTHING in your account, call us at 732-223-9000 so we can discuss it.
Tom
Thomas Mullooly
Mullooly Asset Management LLC
Our Only Business Is Fee-Only Investment Advice
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