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Investment Perspective: PEAK to PEAK

| October 05, 2017
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PEAK to PEAK  - 10 Years Since the Crash

October 9th is exactly ten years from the day that the stock market peaked prior to the Financial Panic of 2008.  It was quite a decade; but what if you had known beforehand that the following events were going to occur:

  • That mark-to-market accounting rules would almost destroy the banking system,
  • Several well-known financial firms would fail or be taken over by the government,
  • Unemployment rates would soar to 10%
  • The economy would experience the deepest recession since the 1930s,
  • A new president would socialize much of the health care system and raise income taxes,
  • And federal debt would be more than 100% of GDP, with massive annual deficits predicted as far as the eye could see.

Knowing beforehand that all of this was going to occur, how would you have invested your money?  Would you have had the courage to invest in the S&P 500, or would you have elected to set the decade out in treasuries, cash or gold?  Knowing that these events were about to occur, it would have been awfully tough to pick stocks. Yet, that’s the asset that did the best. Here are the results:

Certainly, there are other things to consider besides return. You might have slept better by investing in cash or Treasury Notes; but you’d have fewer total assets today compared to if you had stayed long stocks.

All indices are unmanaged and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Investments are subject to risk, including the loss of principal. Because investment return and principal value fluctuate, shares may be worth more or less than their original value. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results. Talk to your financial advisor before making any investing decisions.

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