Shielding Your Financial Future: Navigating Market Turbulence and Recessions

What if you could safeguard your financial future during turbulent times in the stock market? Join us as we explore the possibility of a recession, its potential impact on the market, and strategies to protect your investments. In this discussion, we revisit five significant moments in the history of the S&P 500, where the market experienced a drop of at least 30% in a year, including the Great Depression, Black Monday, the dot-com bubble, the global financial crisis, and the COVID-19 market correction.

We share insights on the causes, duration, and recovery time for each event, and important lessons learned from these market downturns. Discover the benefits of using accounts with 100% safety or those with a 30% protection buffer, which can provide peace of mind amid market volatility. Learn how these accounts can potentially offer attractive interest rates while minimizing your exposure to significant losses. Don't miss this opportunity to equip yourself with valuable knowledge to safeguard your financial future during uncertain times in the stock market.

Interested in learning more? Visit us at https://www.hollifieldfinancial.com/ or give us a call at (843) 400-3022.

Transcript

Speaker 1: 0:00

Hey guys, i want to take a minute and talk to you about, you know, are we going into a recession? Are we in a recession And what happens if we go into a recession? So in the history of the stock market, there have been five times where the S&P 500, you know, the S&P 500 is what most people consider to be the stock market, it's the 500 biggest companies And that is typically used to be the Dow, but now that is typically what people look at when they think about the stock market, right? So there have been five times where that has dropped at least 30% in a year. So I'm going to kind of read them off and talk about it a little bit. Okay, the Great Depression. The Great Depression obviously was really, really bad And we understand that the Great Depression dropped 80% and took four years to recover. So obviously that was bad. You know a lot of bank closures, we all know about the Great Depression, so we're not going to stay on that.

Speaker 1: 1:00

Black Monday. Black Monday was 1987. That was a rapid stock drop. It dropped really fast And basically it was rising interest rates, it was computerized trading And the market dropped and it took two years to recover. It actually took until 1989, until it got back up to the level that it was when it crashed.

Speaker 1: 1:26

We have the dot-com bubble. When the dot-com bubble burst, that was really bad And if you've been to my seminar, you know that we talk a little bit about this one here. Okay, so this was. You know this was. Everything was overvalued. You know there was an internet bubble and it was 49% overall And it took until 2002 to drop or to come back, rather. So, 49%, that was really bad And if you think about that, that wasn't as bad as the Great Depression, but that was a really bad time in the country And a lot of you you know that is close enough in to where a lot of you probably remember that. You know, if you had money invested in your 401Ks and your IRAs, you were probably pretty aggressive at the time And a lot of people lost a lot of money. It took a couple years to recover.

Speaker 1: 2:16

Okay, the next one we're going to talk about is the global financial crisis. The real estate bubble is what I think of it as and what you probably think about it, as you know. The subprime mortgage crisis. You know they had. They made a movie out of it the big, short, interesting movie. But you know that was really bad. You know they had to shut the market down because it was dropping so fast And that time the high point peak to trough. so, highest to lowest point, there was 59% And it took four years to recover. That's a long time, you know that's a long time.

Speaker 1: 2:56

And then we have the COVID. You know the great correction of COVID And we all understand that. You know 34% took five months, jumped right back up. You know most 401Ks lost about 34%.

Speaker 1: 3:10

So one of the things that I talk about in my seminar is you know we have all these times in our life where you know the media will pitch certain things to us, right, and, and I like to think about like this right, the Great Depression, great Depression. Right, great Depression, the Great Recession. You know they actually call the real estate bubble the Great Recession, which is ridiculous, but they were trying to basically mimic it with Great Depression. The Great Correction that was COVID. You know when COVID happened, great Correction. And then now we are currently in something they call the Great Resignation, which you know it's like great, great, great. You know what I think when the media says great, that means you're probably going to lose money in the market, right? So if, if next year or two years from now, the media comes out and you look at the news and they say, hey, we're having the great blank, i would recommend being kind of safe with your money, because every time they label this as great, then you know that something is is going on. So those are the five times that the market has dropped at least 30%, and you know how can you protect yourself from that.

Speaker 1: 4:26

Well, there are, there are accounts that are, of course, completely safe. You know that we use a lot that are 100% safe, because some people don't want that risk, some people don't want to go, you know, up and down on that roller coaster, right? And there are some accounts that we put a 30% protection. And listen, the reason why we put a 30% protection on this is because, if you look at the time and, by the way, what that means is, in one year, if the market drops up to 30%, your principal is completely protected. Okay, so if it goes past 30%, you're basically you own the market, like you're down, but if it drops 25 or 29%, then your principal is actually completely protected. The reason why we do 30% is because it's very rarely ever happens. If we were to do 15%, that happens a lot And we've been doing these types of accounts with that 30% protection on it for years and we've never had anyone lose any money.

Speaker 1: 5:24

And the idea behind that is actually not to completely 100% FDIC insurer, checking account, savings account, you know rock solid. It's just to have a little safe barrier or buffer there, right A buffer, so that you can say, hey, look, i have this protection and can I get an interest rate attached to it. And a lot of times, by adding that, you can actually get like an eight to 11% interest rate for a year. And banks will put these out and they're fantastic and they're very popular. Well, you can sit your money there for a year, you earn eight, 10, 11% and you have oftentimes that 30% barrier which says, hey, this is very safe. This has only happened five times in the history of our country and it's very, very safe. So I love to talk about those because I think it's really fantastic.