Investors need the return potential of stocks to grow wealth and outpace inflation.
Yet stock market investments expose investors to a bumpy ride with unpredictable periods of severe losses.
A Bumpy Ride May Cause Untimely Exits
The trouble with ‘buy and hold’ is that a bumpy ride makes it hard to know when to buy and difficult to hold on.
Bumpy rides often cause investors to ‘buy and fold’ – causing detrimental effects on long-term results.
Seek a Smoother Ride
Financial plans are built with the best of intentions and generally assume a consistent return.
But the reality is, the stock market is unpredictable.
Which looks like a smoother ride to you? Which would you prefer in building a financial plan?
This graph shows twelve, 10-year rolling period returns for the S&P 500 Index and the Swan Defined Risk Strategy Select Composite. The first period is 1/1998 to 12/2007; the last period is 1/2009 to 12/2018. Each period contains at least one bull market and one bear market.