What is the future of your retirement? It just might shock you (or maybe not, unfortunately) that the stock market rebound needed to get back to even after a significant loss is much higher than the loss itself, and each of these market losses were all 100% out of our control. These events were due to the actions of others, yet each one greatly affected your investments.
Here is what I mean:
- 2001: Enron collapses; market falls -12.7%. Rebound needed is 14.6%
- 2002: WorldCom collapses; market falls -10.0%. Rebound needed is 11.1%
- 2003: Martha Stewart indicted; market falls -21.3%. Rebound needed is 27.1%
- 2008: Bernie Madoff arrested; market falls -35.6%. Rebound needed is 55.3%.