Recent Market Slide Supports Active Portfolio Management

Aug. 9, 2011 - PRLog -- On August 8, 2011, the Dow closed at 10,809.  Just five days ago, on August 3rd, it closed at 11,896.  That’s roughly a 10% slide in just 3 business days, the worst single day loss since October 15, 2008, and the 5th largest drop in the last decade- all occurring in the same week. Monday's market woes were exacerbated by growing fears of further damage to the fragile global economy, already suffering from sagging consumer confidence and Europe's debt crisis.  President Obama was quoted as saying, "Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we've always been and always will be a triple-A country."  Unfortunately, traders today didn’t find much comfort in Obama’s words as the sell off experienced a few moments of recovery today but closed down 634 points.

While the days ahead pose a grave degree of uncertainty, it perhaps is an opportune time to revisit the practice of Active Portfolio Management. With this strategy, portfolio managers can move capital quickly into more stable investments when declines such as today occur.  Why is this so critical to maintaining your wealth?  
Let’s look at some real numbers.

Statistics show that those investors who can avoid the worst days in the market fair better than those who are lucky enough to catch the best days and best timing.  Simply put, you make and preserve more wealth by missing the bad days than you do by capitalizing on the best days.  Here’s why…

If your portfolio was worth $200,000 last Wednesday and then experienced the same 10% decline that rocked the Dow, you now have a portfolio worth $180,000.  However, a recovery now of 10% only gets you back $18,000 (10% of $180,000) and brings your value to $198,000.  You’ll actually need more than an 11% recovery to make up for your 10% loss.

Active Portfolio Management could have shifted assets at the onset of the slide and perhaps could have missed Monday’s crash entirely.  Limiting your losses over the past week to single digits rather than double allows for much faster recovery and, over time, can result in literally tens of thousands of dollars difference in your portfolio value.  In today’s troubled economy, small factors such as this can have a drastic affect on your retirement and quality of life.

If you’d like to discuss this concept further, I invite you to contact me for a no-obligation consultation and portfolio analysis.  Invest 20 minutes into learning about a strategy that could save your family a great deal of stress and capital.  John Dubots, Dubots Capital Management, 888-605-8363  http://www.jpdcapitalmanagement.com

Investment Advisory Services offered through John P. Dubots Capital Management, LLC, CA License # 0822926

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John P. Dubots Capital Management, LLC is a Registered Investment Advisory firm located in Temecula, California. We provide our clients with financial services and access to products from many of the nation’s "leading" investment companies. Our representatives work hands-on with clients to help investors meet their financial goals. Before we make recommendations, we first need to fully understand your needs and goals. Together, we evaluate and plan for long-term wealth creation and estate preservation, making use of a wide variety of investment products. Our Clients consist of retirees, pre-retirees, individuals, sole proprietors, partnerships and corporations. We assist more than 150 individual and corporate investors to achieve their investment goals. We have been in business since 1991. We would enjoy the opportunity to discuss with you how to make your financial dreams a reality. http://www.johndubots.com