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Did you know the average high temperature for both San Diego and Nashville is 70 degrees? While the average annual temperature does give you a general sense of a city’s climate, the number hides how much the weather varies from month to month. For instance, San Diego hovers around 72 degrees virtually every day of the year. On the other hand, Nashville has scorching hot summer days reaching near 90 degrees, while the winters average around 50 degrees (with an average of 7 inches of annual snowfall).

If you are reading this article, you are probably less interested in meteorology and more concerned with how this all relates to your investment strategy. Let’s take a look at the S&P 500’s annualized return over the last 50 years (i.e., 1970 through 2019).

The average annual return for the period is 10.6%. However, when the market rises, there was an average positive return of 18.1%. When it retreated, the market experienced a negative average return of -14.8%. Armed with this knowledge, I urge you to think of the stock market as one of extremes, not averages. Much more Nashville than San Diego.

Delving into the numbers since 1970 a bit further reveals the S&P 500 has experienced positive annual returns 80%of the time while falling the other 20%.

Now let’s relate all this climate and investment knowledge to gambling for a moment. What if I invited you to join me at a casino in Las Vegas where you are likely to win 80%of the time? Would you say those are attractive, average, or poor odds? I think we agree an 80%chance of winning is downright phenomenal and you’re quickly accepting my gracious invitation, right?

Now, how about I sweeten the deal even more and offer to charter a private plane to take us to Vegas? You’re still my wingman, correct?

But what if I tell you the plane only has an 80%chance of landing safely? Would you still join me?

Probably not. Maybe you’d offer to drive us out there, but either way, you just experienced the difference between probability and risk. The plane in this scenario is more than likely to land safely — 80%of the time, in fact. But the 20%of the time the plane crashes, it’s catastrophic. Sure, the market has gone up 80%of the time since 1970, but why would you accept a 20%potential rate of failure with your life savings?

The scenario is not to say you shouldn’t have money in the stock market — quite the contrary. Equities will likely have a prominent place in your portfolio for years to come. However, if you are approaching retirement (or already retired), it’s not prudent to invest in largely the same manner you’ve been since you were in your 40s and 50s.

As you migrate from the accumulation phase of investing to the principal preservation and income generation stages, it’s vital to segment your investments based on specific goals and objectives. After all, growing, protecting, and generating income are three competing priorities.

My mother is a retired high school English teacher and loves when I use metaphors. A metaphor for investment planning would be a boat sailing the ocean, battling waves and strong winds. The past has shown various market periods when the investment winds have been at our backs and the waters were calm and smooth. During those times, we should cast the sails high and capture all that momentum.

Market history has also shown prolonged periods when the waters were extremely choppy and we faced strong headwinds. During these periods of market turbulence, if you only deploy a pure sailing strategy, you’ll be blown right back from where you came. During these stormy times, you need to take down the sails, get out the oars, and muscle through.

I use a sailing metaphor, but perhaps offense and defense or engines and airbags resonate more with you. Regardless, if preserving your capital and/or generating income have become your priorities, you’ll need some rowing strategies in your arsenal.

Discovering if your portfolio is designed to prosper during good market environments and withstand poor ones is essential. You wouldn’t sail the coast of San Diego without preparing for potential storms. Make sure you give your financial future the same amount of preparation.

This content was brought to you by Impact BrandVoice. David W. Johnston, CFP® is a registered representative of and offers securities through First Allied Securities, Inc., member FINRA/SIPC. Investment advisory services offered through First Allied Advisory Services, Inc., a Registered Investment Adviser. CA Insurance License #0F94827. NPN#749058 DT# 1033410-1120

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Did you understand the average high temperature for both San Diego and Nashville is70 degrees? While the average yearly temperature does offer you a general sense of a city’s environment, the number conceals just how much the weather condition differs from month to month. For instance, San Diego hovers around 72 degrees virtually every day of the year. On the other hand, Nashville has scorching hot summer days reaching near 90 degrees, while the winter seasons average around 50 degrees (with approximately 7 inches of yearly snowfall).

If you read this post, you are most likely less thinking about meteorology and more worried with how this all relates to your financial investment technique. Let’s take a look at the S&P 500’s annualized return over the last 50 years (i.e., 1970 through 2019).

The typical annual return for the period is 10.6%. When the market increases, there was a typical favorable return of 18.1%. When it retreated, the marketplace experienced a negative average return of -148%. Equipped with this knowledge, I advise you to think of the stock market as one of extremes, not averages. Much more Nashville than San Diego.

Exploring the numbers considering that 1970 a bit more reveals the S&P 500 has experienced positive annual returns 80%of the time while falling the other 20%.

Now let’s relate all this environment and investment understanding to gambling for a minute. What if I welcomed you to join me at a casino in Las Vegas where you are likely to win 80%of the time? Would you say those are appealing, average, or bad chances? I think we concur an 80%chance of winning is downright sensational and you’re rapidly accepting my thoughtful invitation, right?

Now, how about I sweeten the offer a lot more and provide to charter a personal plane to take us to Vegas? You’re still my wingman, correct?

However what if I inform you the plane just has an 80%opportunity of landing securely? Would you still join me?

Most Likely not. Perhaps you ‘d provide to drive us out there, however in either case, you simply experienced the distinction in between likelihood and risk. The airplane in this situation is more than likely to land safely– 80%of the time, in fact. However the 20%of the time the aircraft crashes, it’s catastrophic. Sure, the marketplace has increased 80%of the time considering that 1970, however why would you accept a 20%potential rate of failure with your life savings?

The situation is not to state you shouldn’t have cash in the stock market– rather the contrary. Equities will likely have a prominent place in your portfolio for many years to come. Nevertheless, if you are approaching retirement (or currently retired), it’s not sensible to invest in mainly the exact same manner you’ve been since you were in your 40 s and 50 s.

As you move from the accumulation stage of investing to the primary conservation and income generation phases, it’s crucial to segment your financial investments based upon specific objectives and objectives. After all, growing, safeguarding, and creating earnings are three completing top priorities.

My mom is a retired high school English instructor and loves when I use metaphors. A metaphor for financial investment preparation would be a boat cruising the ocean, fighting waves and strong winds. The past has actually shown various market periods when the investment winds have actually been at our backs and the waters were calm and smooth. Throughout those times, we need to cast the sails high and record all that momentum.

Market history has likewise shown extended durations when the waters were extremely choppy and we dealt with strong headwinds. Throughout these durations of market turbulence, if you only release a pure cruising method, you’ll be blown right back from where you came. During these rainy times, you require to take down the sails, go out the oars, and muscle through.

I use a cruising metaphor, but perhaps offense and defense or engines and airbags resonate more with you. Regardless, if maintaining your capital and/or creating earnings have become your top priorities, you’ll need some rowing strategies in your arsenal.

Discovering if your portfolio is designed to flourish during excellent market environments and withstand poor ones is vital. You wouldn’t cruise the coast of San Diego without getting ready for prospective storms. Ensure you provide your monetary future the very same amount of preparation.

This content was brought to you by Effect BrandVoice David W. Johnston, CFP ® is a registered representative of and offers securities through First Allied Securities, Inc., member FINRA/SIPC. Financial investment advisory services offered through First Allied Advisory Solutions, Inc., a Registered Financial Investment Advisor. CA Insurance Coverage License # 0F94827 NPN #749058 DT # 1033410-1120

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Did you understand the average high temperature for both San Diego and Nashville is70 degrees? While the average annual temperature does give you a general sense of a city’s environment, the number conceals just how much the weather condition differs from month to month. San Diego hovers around72 degrees practically every day of the year. On the other hand, Nashville has scorching hot summer days reaching near90 degrees, while the winter seasons average around 50 degrees (with an average of 7 inches of yearly snowfall).

As you migrate from the accumulation phase of investing to the principal preservation and income generation stages, it's vital to segment your investments based on specific priorities.

As you migrate from the accumulation phase of investing to the principal conservation and earnings generation phases, it’s essential to section your financial investments based upon particular concerns.

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If you are reading this short article, you are probably less thinking about meteorology and more worried with how this all connects to your investment method. Let’s have a look at the S&P 500’s annualized return over the last 50 years (i.e., 1970 through 2019).

The typical annual return for the period is 10.6 %. When the market rises, there was a typical positive return of 18.1 %. When it retreated, the market experienced an unfavorable average return of – 14.8 %. Armed with this understanding, I urge you to consider the stock exchange as one of extremes, not averages. A lot more Nashville than San Diego.

Delving into the numbers given that 1970 a bit additional reveals the S&P 500 has actually experienced positive annual returns 80 %of the time while falling the other 20 %.

Now let’s relate all this environment and investment knowledge to gambling for a minute. What if I invited you to join me at a casino in Las Vegas where you are most likely to win 80 %of the time? Would you state those are attractive, average, or poor odds? I think we concur an 80 %possibility of winning is downright phenomenal and you’re quickly accepting my thoughtful invitation, right?

Now, how about I sweeten the deal much more and provide to charter a private plane to take us to Vegas? You’re still my wingman, correct?

However what if I inform you the airplane just has an 80 %chance of landing safely? Would you still join me?

Most Likely not. Maybe you ‘d offer to drive us out there, but in any case, you just experienced the difference in between possibility and risk. The airplane in this situation is more than most likely to land safely– 80 %of the time, in truth. The 20 %of the time the aircraft crashes, it’s devastating. Sure, the marketplace has gone up 80 %of the time given that 1970, but why would you accept a 20 %prospective rate of failure with your life savings?

The situation is not to state you shouldn’t have money in the stock market– quite the contrary. Equities will likely have a popular place in your portfolio for several years to come. However, if you are approaching retirement (or already retired), it’s not sensible to invest in largely the same way you have actually been since you were in your 40 s and 50 s.

As you move from the build-up stage of investing to the principal preservation and income generation phases, it’s crucial to segment your investments based upon particular goals and goals. Growing, protecting, and generating income are 3 contending concerns.

My mother is a retired high school English teacher and loves when I utilize metaphors. A metaphor for financial investment preparation would be a boat cruising the ocean, battling waves and strong winds. The past has revealed various market durations when the financial investment winds have actually been at our backs and the waters were calm and smooth. Throughout those times, we need to cast the sails high and catch all that momentum.

Market history has also shown prolonged periods when the waters were extremely choppy and we faced strong headwinds. Throughout these periods of market turbulence, if you only release a pure sailing technique, you’ll be blown right back from where you came. During these stormy times, you need to remove the sails, go out the oars, and muscle through.

I use a sailing metaphor, but possibly offense and defense or engines and air bags resonate more with you. Regardless, if protecting your capital and/or producing earnings have actually become your priorities, you’ll need some rowing methods in your arsenal.

Discovering if your portfolio is developed to succeed throughout great market environments and endure poor ones is important. You wouldn’t sail the coast of San Diego without getting ready for possible storms. Make sure you give your monetary future the same amount of preparation.

This material was given you by Effect BrandVoice David W. Johnston, CFP ® is a registered agent of and offers securities through First Allied Securities, Inc., member FINRA/SIPC. Financial investment advisory services used through First Allied Advisory Services, Inc., a Registered Investment Advisor. CA Insurance License # 0F94827 NPN #749058 DT # 1033410 – 1120

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Marco Bitran
Husband and father of two children under age 5, Marco also enjoys walks in nature, squash, running road races, and photography. He regularly contributes significant time and resources to the Combined Jewish Philanthropies, the MSPCA and other animal rights organizations, and the Bitran Charitable Foundation. Marco has also volunteered and consulted for public housing support organizations such as the Somerville Homeless Coalition, created by the local community’s grassroots response to the social crisis of homelessness.