Roger Khoury, a Managing Partner of RBJ Financial Group says, “The number one concern, when investing in the market, would be in keeping more of the gains that you’ve made.”
Anyone that has any investments in the market should be concerned about the exposure to the risk in the market, whether the investments are managed for them through a 401K or they are directly involved with self-directed investments, the number one concern really would be in not only keeping your gains but, especially, hanging onto your principal capital.
People are afraid of losing money in the market, but then they’re taught if the market goes down 10, 15, 20 or even 30%, just hang on for the ride. It’s long-term, and the market always eventually goes up. The problem is, sometimes, if you are caught on the back end of that cycle and you’re in your late 50s or 60s, you don’t have time to make up a 20 or 30% loss. You can’t afford to take a correction in the market that steep.
What would be helpful is to understand there are cycles and seasons to everything in life. In fact, the world is full of cycles: from day to night, is a cycle, we have weather cycles, your body and your heart pumps in a cycle. Everything is cyclical, but it’s important to understand that those cycles are not necessarily something to be viewed only in the long-term.
In fact, if you look at a weather forecast, the closer we are to tomorrow in forecasting the weather the more accurate it will be. If the forecast says it’s going to be hot, there is an 80% chance of the prediction being right. The further out a forecast is going to be, the less likely it is going to be accurate or correct. Therefore, the probability of success is going to be closer to 50/50 versus 80%. If you are told that next month, exactly 30 days from today, we’re going to have a warm day instead of a cool day, there is probably only a 50/50 chance of being right.
The idea of long-term buy and hold, especially in the current economy and the evolving and developing one, is going to prove to be a negative experience for most investors, especially the baby boomers.
Predictive failure technology essentially mitigates that risk and helps people know when it’s time to get out of the market before it actually turns and goes against them. 3D Apex predictive failure technology® is not software.
Khoury told us, “It’s actually an analysis and forecasting model. It’s a method of approaching the markets that is very systematic in how all the different variables and factors that are available is organized. It is how that information is filtered that gives the output and the range of results that will warn of a market fall, very much like a weather forecast warns of a storm so people can properly prepare and seek shelter.”
What people want to do is focus on short-term cycles to medium-term cycles, where they can engage the market at an opportune time to take advantage of a seasonal upswing. Using the 3D Apex predictive failure technology® you now have a way to measure when that season’s coming to an end and when the next one is about to begin.
Everyone knows when summer’s starting to end and fall and/or winter’s beginning. The same is true with the markets.
If forewarned of a market fall, the investor can either go into a cash or cash equivalence or they can go into alternative investments that actually will go up when the general market is going down. It’s a little bit of a teeter-totter. An investor needs to understand how to do that.
To see more about Roger Khoury visit his website at: http://rbjfinancialgroup.com/. Or, call (310) 499-4187.