"Stay the Course"

The financial WORLD is always changing - even in our own backyard, Detroit!  If you are advised to "Stay the Course" in this ever changing landscape, you could be jeopardizing your future — because following the same old path could lead you in the wrong direction.

"The only investors staying the course in todays ever changing global financial landscape are those with a broken compass."

If you are ready to chart a new course with confidence, contact us for a complimentary stress test of your current portfolio. Experience the Difference!

"Shocks Matter"

Lloyd Nirenberg, publisher of the RocketCap Intellectual Property Stock Index calculated:

"Figure 1 shows that if the investor has a 30-year planning horizon, he or she could expect a SWR of 4.6%. But if a return shock of -50% were to occur randomly in any year during the horizon, the SWR would be reduced to 3.2%. Similarly, return shocks of -30% and -10% require corresponding SWRs of 3.8% and 4.3%.

Suppose an investor planned for a 4% SWR with the above assumption of 5% expected returns and 2.5% inflation. She would expect her account to be depleted in 37 years. But if a shock were to occur randomly during that horizon, the investor's depletion year would decrease to 34, 28 and 21 years for return shocks of -10%, -30% and -50%, respectively. A drawdown of -10% may be tolerable, but -30% is shocking!

"Shocks matter, even over a long investing horizon. This calls into question the buy-and-hold idea, which by definition exposes retirees to unacceptable return shocks."

Lloyd Nirenberg publishes a blog that compiles his analyses of various quantitative problems of money and knowledge, and also publishes the RocketCap Intellectual Property Stock Index. For more information please contact: rocketcap@gmail.com.

For over 22 years the goal of Conservativemoney LLC has been to establish “shock resistant” retirement income programs, monitor them for our clients every day, and make changes as the market dictates using unemotional indicators.