From the beginning of 1966 through the end of 1982 the stock market as measured by the Dow Jones Industrial Average made virtually zero progress. On January 1, 1966 the Dow Jones Industrial Average closed at 983.  Seventeen years later, on December 31, 1982, the Dow Jones Industrial Average closed at 1046 (data provided by TradeStation Securities). That’s a 17 year period when buy and hold index investors earned only 0.37% per year on an annualized basis.

So ask yourself, if you retired today and turned your life savings over to a firm with a passive index investment philosophy and the market does a repeat of its 1966-1982 performance for the next 17 years could you live on those returns. That’s a 17 year period making money market returns or less on your life’s savings.  

The year 2000 marked the beginning of another secular bear market. From March 24, 2000 through February 12, 2016 the S&P 500 generated a total return of 22% for an average annualized 16 year gain of 1.4% per year.   Clearly, this is another period that has been devastating to passive index investors.

So be very careful about listening to the siren’s song pushed by some about the benefits of low cost passive index investing.  

Although we've experienced only three prior secular bear markets (in the 20th century), they've each managed to last 16 to 21 years, with an average annual return of only around 1.5%. (See the table below.)

Secular Bear MarketsMarket Duration (Years)Average Yearly Return (Dow)
1906-1921 16 1.58%
1929-1949 21 1.69%
1966-1982 17 1.59%
2000- ? ?

Source: Amateur-Investor.Net

The average length of secular bear markets over the past 100 years is 18 years.

Unfortunately, our economy has the unpleasant distinction of having some of the worst economic fundamentals since the Great Depression: high real unemployment, mountainous sovereign debt and unsustainable municipal spending and future obligations.

Consequently, the stock market may continue to struggle for years. But remember one thing; the best professional money managers have learned how to make money in the markets even during the worst of times. This is why you want to place your retirement funds into the hands of experts who have a solid track record of successfully trading the markets.  

There are thousands of financial advisors who are begging for your money and who put on very convincing professional presentations in an attempt to have you transfer your funds to their firms. But before making such an important decision you need to ask what kind of returns have these firms generated for existing clients over time, during both bull and bear phases of the market?

Retirement Maximizer, Inc. represents tactical investment managers because we do not believe that a passive index tracking approach is the safest or most profitable way to invest in the market.   History bears this out.

Retirement Maximizer, Inc. uses research reports, white papers, manager interviews and rating agencies like Morningstar Advisor, Lipper Marketplace and Pension and Investments to determine who the top money mangers are and then creates a partnership with these firms to create a window of opportunity for our clients to invest with those managers.  The window of opportunity allows our clients to invest with managers who only work with independent advisors or who have minimum capital requirements for clients who are not working with an advisor which would otherwise prevent them from investing with these managers.  So if you are tired of being beaten by both your advisor and the market then give us a call or send us an email and let's start a discussion about how we can help you change the performance of your portfolio in the future.

The bottom line is that we want you to be successful, so contact us today about your investment needs.


Retirement Maximizer, Inc. is a registered investment adviser in the States of Florida and Texas. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.

Disclaimer: Nothing in this posting should be considered personalized investment advice. These comments are of a general nature and may not apply to your particular situation.