Bobby had been working a corporate job for the past 20 years. He had saved about $500,000 in his 401k. His consistent contributions and company match grew aggressively since they had been invested in some stocks that a friend suggested.

Life was grand! Business was booming! He just bought a new sports car and was going on vacation with his family.

It was just like every other year, but what lurked around the corner had the power to make grown adults cry.

Bobby looked at his statements every so often.Things were changing.The economy was starting to falter.

When his first $10,000 of value was lost, he shrugged it off.

The next $20,000 made him look twice.

Another $50,000 came off faster than he could wrap his head around it.

FEAR started to grab hold when his next statement showed $75,000 was lost in that month alone.

Sheer PANIC struck him as he saw $64,000 slip out of his fingers.

“That’s the final straw!” he thought “I’m going to save what I have left! I can’t bear to lose anymore!”

Bobby grabbed his 401K by the scruff of its neck and threw everything intoCASH. His panic subsided when the market turned down again. He was safe; he couldn’t lose anymore, cash was his savior.

“I’ll get back in to investing when things get better.”

The market moved up little by little but things were still shaky. With every run up there was still a significant drop. The cash didn’t lose value so Bobby was comfortable.

Over the next few years, the market moved and soon enough it was reaching

“Record Highs!”

Analysts were saying that this run up is not sustainable and that there is a correction overdue!

There were “Record P/E ratios!”

These headlines made him more nervous. He stayed the course and kept his cash.

It was nice.

It was secure.

It never faltered.

However he had been losing money the whole time. He was losing the opportunity to make back his losses and then some. He left $400,000 on the table.

The above example uses the returns of a small cap mutual fund being the only thing Bobby had invested in at the suggestion of a co-worker.

Looking back, it’s easy to spot the mistake. The sad truth is that it’s much too common of a mistake. Are you in the same boat? How did you pick your investments? How will you protect yourself in a downturn and then take advantage of the future? Talk to us on how to maximize your returns and minimize your risk. Make sure you’re not the one who leaves thousands of dollars on the table.