| How To Live Better In Retirement? |
Our pursuit of a profitable and safe investment philosophy started with planning the years in retirement. As you well know, it takes a significant net worth to live "well" off of single digit returns. We've all heard that 4 percent is the typical withdrawal rate recommended by most of the financial world. If you have a net worth of tens of millions of dollars, this is probably something you can live with. If like most of us who won't live long enough or inherit enough to have this size of nest egg, we are expected to live less of a retirement lifestyle. The view we take is if we can find a way to safely earn more in retirement, not only can we live better with the amount we have accumulated, we can also retire earlier as it will take less net worth to provide the income we all want.
If you haven't read the Achieve Retirement page, I will try to sum it up for you in a quicker read. Basically we designed an investment program that most of the time accepts the best money market or CD rates we can find. At the same time, there are times the market provides exceptional risk/reward ratios. We've all seen the market go on strong runs like the last half of 2006 into 2007, the summer of 2007, etc. just to name a few examples.
We noticed after years of research that the market will have significant trends about 2 to 4 times per year with an average of 3. Knowing that we wanted to "only" be in the market during these "profitable times" and in cash the rest, we worked relentlessly on indicators that would tell us when to be in the market and when to be in the safety of cash. We aren't trying to capture tops or bottoms, we aren't trying to predict the market, we are only looking for safe and profitable times to join the trend of the market, exiting when it is no longer safe or profitable. We'd like to say we are never wrong but anyone who has spent any time investing knows this isn't possible. So how do we safely strategize for this?
There are two key factors here:
1. As mentioned, we are very selective about when we enter the market based on our indicators. These indicators are right about 2/3 of the time and have a 3 to 1 ratio of winning percentage return.
2. In order to be invested when the market makes a good run, you will on occasion be invested and the trend doesn't continue as expected. We have tight controls for this. Our indicators will usually tell us to exit the market even before a stop loss would.
Below are the results we experience:
As mentioned earlier, the market provides an average of 3 significant moves per year. These two significant moves provide average returns of about 8% each, we earn a few % points while in cash, and have an average yearly cost of about 5% when the trend doesn't develop. This provides us with an average return of about (3times8% + 2%moneymarket -5%falsetrend=21%) a year. We won't achieve this return every year but in some years we earn much more hence the average.
What does the RetirementX2 service provide? We will send you an email with details of what we are invested in today, our favorite place for cash, and send you email updates any time we make a change to our investment holdings. Every move we make will be delivered to you the night before we make it.
Let us show you how much money you can accumulate when you stop losing money. Click on the Subscribe tab now and start living better in retirement today!
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