The battle to break even

2020 has been a crazy ride. From COVID-19 and extreme market volatility to social unrest and the presidential election, there’s a lot going on. Once you pile on the endless news cycle and Twitter tirades, it becomes more challenging for advisors and clients alike to cut through the clutter and decipher fact from fiction.

You may have gotten a call or two (or 50) from clients worried about their portfolio losing value due to the stock market. They may have asked about adjusting their overall plan or timing the market. Of course, in a perfect world, we’d know when it’s the exact right time to sell—but life just isn’t that easy.

What we do know is that it takes a lot more to recoup losses and get back to even. If a client loses 20% in the market, they may assume they need 20% to break even. That’s not the case, unfortunately, as they’d need 25% to get back to even. As this bar chart shows, it’s all too easy to have a financial leak, but it’s much harder to patch it back up:

The best offense is a good defense

If you follow the best of the best in sports, you know that a stellar offense can only get you so far. It's essential to have a top-notch defense. That’s why it’s critical to find ways to help clients gain more control by protecting what they can, such as taxes and exposure to market risk. Call us at 866.866.7050 to learn how we can help. And be sure to download the free (and customizable!) break-even marketing piece to share with clients and prospects to show just how much it takes to recover from market loss.

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