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SMI Visitor's Blog
     Welcome to the SMI Visitor's Blog where you'll find selected excerpts from our Member's Blog, plus occasional posts created especially for our visitors. For SMI Web Members, click here to go to the SMI Member Blog. March 23, 2009Gimme shelterAfter my rather lengthy (and financially depressing) post on Friday, one member commented: "I already knew it was bad and getting worse. What I keep hoping to see in my financial newsletter are a variety of protection strategies." I thought an answer was worth its own post. First, I will point out, as always, that the Four Levels process, if followed faithfully, is the best "protection strategy" for the average SMI member. Being debt-free and having sufficient emergency savings will go a long way to seeing anyone through the present crisis. Second, following our allocation recommendations, based on one's age and risk tolerance, would also have protected those who test out as being risk-averse from major damage. Here are the 2008 results for various age/risk combinations (keeping in mind the market was off -37% last year):
5-10 years until retirement / Preserver temperament / 50/50 = ~17% loss 5 years until retirement / Researcher temperament / 50/50 = ~17% loss 5 years until retirement / Preserver temperament / 40/60 = ~13% loss Early retirement years / Researcher temperament / 40/60 = ~13% loss Early retirement years / Preserver temperament / 20/80 = ~4% loss Later retirement years / Researcher temperament / 20/80 = ~4% loss Later retirement years / Preserver temperament / 0/100 = ~5% gain If you have more than 10 years before retirement, it remains our belief that you have sufficient time to recover your losses. But if you don't necessarily buy that and want to brace for further market weakness, that brings us to... Third, the cover article in the April issue, due out for web members this afternoon, will discuss Protecting Yourself Against "The Big One." In it, Mark offers age-based suggestions for those wishing to take further defensive steps.  Email this post
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