This episode currently has no reviews.
Submit ReviewIt's natural to fear a market correction. Losing money (even if on paper) sucks. News reports, act as if market corrections are bad. That's not true. The economy and the markets don't function well without corrections. Just as there are benefits to a forest fire, a market correction is an essential element of a strong economy and market.
Are we headed for a market correction? Last week the S&P 500 was down 3.4%. It's been over 34 months since we've had a correction in the S&P 500 of over 10%. Normally we experience one every 18 months.
I've always likened market corrections to forest fires. Both cause some short term pain but are essential to the long-term health of the forest (or market). I've used this analogy for years. Sure enough, if you read the Benefits of Fire from the California Department of Forestry and Fire Protection, the 4 benefits of forest fires parallel to the benefits of a market correction.
In this podcast I explore these 4 benefits of forest fires and market corrections:
"Fire clears the weaker trees and debris and returns health to the forest"
"When fire removes a thick stand of shrubs, the water supply is increased. With fewer plants absorbing water, streams are fuller, benefiting other types of plants and animals."
"Fire kills diseases and insects that prey on trees and provides valuable nutrients that enrich the soil.
Fire kills pests and keeps the forest healthy."
"Without fire, these trees and plants would eventually succumb to old age with no new generations to carry on their legacy."
Recently I had the pleasure of talking about the retirement landscape with Kim Blanton. Kim works with the Center for Retirement Research at Boston College and writes their Squared Away Blog. Her Blog is about financial fehavior as it relates to working, saving and retiring.
Kim and I discuss the changing landscape of retirement and how we can plan for it.
If your family is considering retiring to a different state, there are some important planning items to consider. To help you, I’ve added a new worksheet to the Retirement Toolbox titled Retiring to a Different State. www.rogerwhitney.com
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