The Financial Plan – Why it is Important to Limit Loss

The Pain to Gain Ratio

  • If you lose 5% of your portfolio, it takes a gain of 5.3% to get back to even.
  • If you lose 20% of your portfolio, it takes a gain of 25% to get back to even.
  • If you lose 50% of your portfolio, it takes a gain of 100% to get back to even.
  • If you lose 90% of your portfolio, it takes a gain of 900% to get back to even.
photo by:kisa naumova

photo by:kisa naumova

Conclusion: If you limit your losses, the road back to prosperity is much easier. Work with your financial advisor to develop an investment strategy that appropriately reflects your individual risk tolerance.

About the author

Lon Jefferies, CFP®, MBA
Lon Jefferies, CFP®, MBA

Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning firm in Salt Lake City, Utah. He is a Certified Financial Planner (CFP®) and a member of the National Association of Personal Financial Advisors (NAPFA). He possesses an MBA and bachelor's degrees in Finance and Marketing from the University of Utah. Lon writes articles for local magazines such as Utah CEO, Business Connect and Utah Business Magazine, and he consistently contributes articles to online magazines such as FIGuide.com and FILife.com (by The Wall Street Journal). Additionally, Lon is an expert author at EzineArticles.com. Lon has been quoted nationally in publications such as the NY Times and Investment News.

Lon can be contacted at (801) 566-0740 or lon@networthadvice.com. Learn more about Net Worth Advisory Group at http://networthadvice.com and visit Lon's blog at http://www.utahfinancialadvisor.blogspot.com.

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