In 2019, the S&P 500 index gained 31.49%. That number was more than three times higher than its average gain of 10.6% over its 50-year average.
That is the only good news you are going to get from me in this blog post. Now, this is the reality of the current stock market environment.
A loss of 20% requires a subsequent gain of 25% to “get your money back” or break even. A loss of 35% requires 54% to break even.
The larger the loss, the disproportionally larger the future investment gains needed to break even.
Today, this fact does not seem as absurd an idea as just a few weeks ago. A loss of 50% demands a 100% gain to “get your money back.”
Ric Lager
Lager & Company, Inc.
