This is simple stuff. But. Many people don’t do that math on investments. If you invest a $100 and the market goes down 50% you have $50. Now. If the market goes up 50% from here. You now have $75. After 50% down, 50% up isn’t the same.
If you have a $100 investment and it goes down 10% you have $90. If it goes up 10% you have $99. The smaller the loss, the closer the same percentage increase gets you whole.
Many people I know lost about 35% in the market decrease. So if they had $100, they now have about $65. If the market goes up 35% they have about $88. They still need it to go up another 14% to be whole again. But you can’t simpley add 14% plus 35% and say the market has to go up 49% to get you whole. The market actually has to go up about 54% to get back to your $100 after a 35% decrease.
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