Should You Be Worried About Your Investments?
Recently, IFA president and founder Mark T. Hebner delivered an important message regarding current market turmoil.
His remarks addressed the significant impact that risk, return, time and diversification have on long-term investments, He also expressed IFA's commitment to help all investors learn how to invest properly, now and for the rest of their lives.
To watch the five-minute video, click on the banner above. The full text of his remarks appears below, along with the links of the historical time periods to which he refers.
" Hi, I'm Mark Hebner, president and founder of Index Funds Advisors. Like you, I have watched with interest the recent turmoil that has gripped the financial markets.
Many investors are worried about the outlook of their long-term investments. For some this concern is justified, and it may prove to be a catalyst to finally learn how to invest properly to achieve greater long-term investing success.
For those who are properly invested, history shows that their investments will withstand this market, just as they have other bad markets, and earn the returns that capitalism delivers over time.
This Site, (Ifa.com), will help you learn how to properly invest for now and for the rest of your life.
With respect to the recent market turmoil, you SHOULD be worried if you are overly concentrated in any one industry, a handful of industries or individual stocks.
You SHOULD be worried if you do not know how much risk you are taking with your investments.
You SHOULD be worried if you do not know how much risk is right for you. This is known as your Risk Capacity. (take our Risk Capacity Survey)
You should NOT be worried if:
- You have a globally diversified portfolio that is the appropriate risk for your risk capacity.
- You should NOT be worried if you are aware of the risk that you are holding, you know that the risk is appropriate for you and you are comfortable with that risk because you understand how your portfolio has performed since the Great Depression and in subsequent up and down markets since then.
- You should NOT be worried if you are properly educated regarding stock market activity and you understand that while bad markets are scary, they have had little impact on the returns of investors who remain in globally diversified portfolios that invest in tens of thousands of companies throughout the world.
- This site will help you put into perspective current market activity in light of 80 years of historical risk and return data for 20 risk-calibrated, globally diversified Index Portfolios. This site details other market downturns such as the one we saw in 1973 and 1974 and how long it took for the globally diversified portfolios to recover from their respective drops.
The 1973 and 1974 Market Downturn
| Back then, an incredible 51% of Americans who participated in a 1974 Gallup poll believed that the U.S. was headed for a 1930's style Great Depression. Two months after that article appeared, the markets turned around and the recovery was in a full swing. |
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The 1987 Dow lost 508 points in one day
(a 23% decline)
In 1987, the markets struggled. The Dow Jones Industrials lost 508 points in one day--a 23% decline.
People were scared then too. In fact, this was a moment when a lot of stock market investors realized that their fascination with the stock market was really an obsession, an addiction that threatened their long-term outlooks.
The New Jersey Compulsive Gambling Helpline reported that in the six weeks that followed that big drop in the Dow, 44% of the calls they received were from stock market addicts. Before that big drop, just about 2% of their calls pertained to the stock market.
| Those who were brave enough to face their addiction, to admit that they had gone too far--taken too much risk and had suffered as a result--were able to recover, to get help and to have the opportunity to properly invest for a better life and a better financial outlook. This current market downturn provides such an opportunity. |
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I know of what I speak. I am the author of Index Funds: The 12-Step Program for Active Investors. My financial advisory business carries the singular mission to change the way the world invests.
I urge you to capitalize on the lessons delivered by the current market conditions and get invested properly.
Start right now by taking the Risk Capacity Survey. This simple survey can be taken in 5-10 minutes and it will tell you how much risk is right for you, and it will provide you with an Index portfolio that matches your risk capacity. Not only that, all 20 Index Portfolios are low-cost, risk-calibrated, fully transparent, risk/return optimized and carry 80 years of historical data.
I hope you find this data as inspiring as we do at IFA. Every chart, article and video reveals important information that will help you invest properly now and for the rest of your life. "