The Math of Gains and Losses

A great article came across my desk just yesterday from a PhD, Craig L. Israelsen, about the percent gain needed to make up market losses. The article simply goes through the math for your clients, in how much in gains they need to recover from the latest downfall in the market. From the article:

“One of the more compelling aspects of investing is the math of gains and losses. Very simply, a 50% gain does not allow a portfolio to recover from a 50% loss. In fact, a 100% gain is required to restore a 50% loss. ”

This article also gives you a simple formula for figuring out specific client scenarios. For the complete article from Dr. Israelsen, Click Here.

Stay Focused.



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