Tuesday, March 10, 2015

Should income investors care about a 300 point loss?

Well this has been an interesting week for investors.   You know that the "person on the street" really does not pay attention to this stuff.   They have their 401K's and Roth IRA's (I hope) and go about earning money,.

It is the rest of us who no longer get a paycheck that pay attention to the market's action.   But should we?

Don't we think long term?

Let's take a quick look at the 2011 Model Portfolio.  The first table presents the data on the market's close in 2014.

The second table is the 2011 Model Portfolio on today's close. (3/10/2015)

You will note that gain uses a change in basis and that is a result of several actions that occurred during the holding period.  See the footnotes below.

I hope the slightly different format does not confuse you.   Gain is about the same but dividend income is up.    Gain at the end of 2014 was 60.31%.   Gain today was 56.28%.   Dividend income expected at 12/31/2014 was $9,474 and this year we expect $9,957.  

So relax and trust your picks and don't care about today's loss.