Saturday, January 10, 2009

What Your Stocks Have to Return So You Can "Break Even."

Think of the current bear market in these terms. If your stocks go down by the down figure, the up figure is what you need to see in order to "break even." This is scary as we approach the 50% decline.

If you are down by: You need to see a return of the following to break even:

Down 5% Up 5.27%
Down 10% Up 11.1%
Down 20% Up 25%
Down 30% Up 43%
Down 40% Up 67%
Down 50% Up 100%
Down 60% Up 150%
Down 70% Up 233%
Down 80% Up 400%
Down 90% Up 900%
Down 95% Up 2000%

Anything down over 50% could take YEARS to earn back(if ever), so protect your nest eggs!

On the other hand, this is a silver lining for the contrarian investor like myself. Regardless of what people have been saying about dollar cost averaging, it works in protracted bear markets like this one. This is the best opportunity to invest since I have been investing (since 1997). Think like a contrarian; profit like a contrarian!

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