“Nineteen percent in nineteen days. That’s how far the markets have declined at the time of this writing. Due to my schedule I am having to write this column several days before printing, and so I am having to make some predictions. As Yogi Berra once said, that’s very difficult to do. Especially about the future.”

So that’s the lead in a column I wrote three weeks ago, when this crash was only 19 days old. How did I do? Well, here was the prediction:

“So, I am going out on a limb and anticipating this will continue, in spite of the fact that Dow futures are sitting at +800 right now. And why should it not? Did we suddenly wipe out CoVID-19? Are airplanes flying full again? Are cruises being booked? Have they reinstituted South by Southwest in San Antonio? Is the St. Patty’s Parade being held? Have schools reopened? Are we getting our much-needed mechanical, electronic, and even medical components from China again?

“My hunch, even though we are talking about the unknown future, is no. These things have not happened. What my guess is, instead of 700 or so cases of CoVID-19, we are well into the thousands with most states involved. If they actually brought the promised and delayed testing online, we are probably showing many, many more than that. I would guess even more schools and churches are closed. My bet would be many theater productions, sporting events, etc., are either dark or being played without fans present. And, I bet the oil trade war between the Saudis and their Russian patrons is still playing out, considerably depressing the markets for American-produced oil.

“So why, then, should we have had a miraculous rebound in the market? Why should it have done anything other than continue its spiral down the drain, if the pandemic is responsible for its decline?”

This was what I wrote 22 days ago. How have I fared? Thirty-seven percent in forty-one days. And once again, as I write this, index futures are up. Another nine points. So the rebound is obviously here, right? Prescient, right? Call me Nostradamus:

“How logical is all of this? How tied to reality? Well, CoVID-19 is aggressively contagious, though it requires direct contact and physical transmission. It is not, however, overwhelmingly fatal except in certain demographics (all of which I seem to be a member!).  However, the damage it’s done to the world’s psyche is extensive. So, in this case, perception is very much reality.

“Yesterday I was reading a notice put out by one of the investment management companies I watch, and here’s what it basically said: markets go down but always recover and so the best thing you can do is batten down the hatches and just ride it out. Let’s test that for a moment.

“If the market has gone down by 19% (37%) as of this writing (three weeks later), how much will it take to recover? Surprise! It’s not 19%, or 20%, or even 21%. It’s 23.5% (60% for a 37% loss). If losses are higher, so is the amount needed to recover. For example, if the market declines by 25%, it requires 33% to recover. Fifty percent declines require 100% gains to recover. This can take a long, long time. In fact, it took 12 years for the markets to fully recover from the dot-com/911 meltdown.”

Remember, this did not start as a financial crisis, though it is very much one, now. This is a health crisis, and it defies credulity to think that financial markets are going to turn around before the pandemic is arrested. Just today the major airlines announced they were considering a complete shutdown of all domestic flights. How will that impact your retirement account?

So, when is the best time to stop losing money? I would say any time after February 12, 2020, when the markets peaked. Barring that, the sooner after that as possible. That would mean, if you still haven’t decided, perhaps today is the day?

“But I don’t want to miss the rebound!” I can hear you saying. And I agree. I don’t want you to either.

Here’s what I propose. Instead of continuing with a sure loser, why not move your money into a sure winner? Here’s how it works. You transfer your assets to one of the oldest, safest, and most secure financial institutions in the world – a financial institution that has never lost any of its investors’ money. Not in the Great Depression, not after 911. Not on Black Monday. Not in 2008. 

That financial institution has financial tools unique to it that can generate about 5%-6% returns with iron-clad safety and is annually monitored in every state and territory to ensure money is never lost.

The financial institution must make money to operate, so it takes about 2% off the top, leaving you about 3%. Now you can either settle for the 3%, or you can leverage your interest payments in the market using options. An option is a contract allowing you to buy an asset in the future for today’s price. 

This can leverage your 3% many times over. In 2016-2018, a time of great gains in the market, these contracts kept right up, with 17% per year growth. The difference was, in the option indexing plan, those gains locked in and became part of the principal, never to be put at risk again. However, since the new, higher amount became part of the principal, all new gains were compounded on top of it.

We don’t want you to miss the rebound. We really don’t. We just want you to do it in a safe and sane manner where all new gains become part of the protected principal, never to be lost again.

If you want to change your outcome, you must change your approach. When would you like to stop losing money? How about today?

Stephen Kelley is a recognized leader in retirement income planning. Located in Nashua, NH, he services Greater Boston and the New England areas. He is author of five books, including “Tell Me When You’re Going to Die,” which deals with the problem unknown lifespans create for retirement planning. It and his other books are available on Amazon.com. He can be heard every weekend on the “Free to Retire” radio show on WCAP and WFEA, and he conducts planning workshops at his New England Adult Learning Center, located in Nashua. Initial consultations are always free. You can reach Kelley at 603-881-8811 or at www.FreeToRetireRadio.com.

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