Nick Maggiulli recently posted the best article I’ve read on the topic of being a buyer during this stock market drawdown as he reframes where we’re at today and what this could mean over the next few years. Here is a quote I wanted to share:
So, if you think the market recovery will take:
* 1 year, then your expected annual return = 50%
* 2 years, then your expected annual return = 22%
* 3 years, then your expected annual return = 14%
* 4 years, then your expected annual return = 11%
* 5 years, then your expected annual return = 8%
Even if we assume it takes 5 years to recover, that would be 8% returns over the next half decade. Where else can you get 8% right now?
If you read any post in this Retirement Digest, make it this one.
- Buying During a Crisis from Nick Maggiulli
Other Recommended Reading:
- The Answers You Don’t Want to Hear from Justin Castelli
- Returns from the Bottom of a Bear Market from Ben Carlson
- When is the Right Time to Buy Stocks? from Michael Batnick
RFG Article from Last Week:
Thanks for reading!
This post is not advice. Please see additional disclaimers.
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I am a Financial Advisor in Pittsburgh and a CERTIFIED FINANCIAL PLANNER™ professional with Shorebridge Wealth Management. I enjoy helping clients and readers find sensible answers to retirement’s big questions. If I can answer any questions for you, feel free to Contact Me or if you think you might be a fit for our practice, see Who We Serve.