Why do stock fluctuate? The answer is that nobody actually knows for sure. Some believe that it's impossible to predict how stocks fluctuate while others believe that by drawing charts and looking at past price movements, they can determine when to buy and sell. The only thing we do know as a certainty is that stocks are volatile and can change in extremely rapidly.

I'd like to share with you the 4 main reasons why do stock fluctuate:

[if !supportLists]1. Supply and demand in the market determine stock price.

[if !supportLists]2. [endif]Price times the number of shares outstanding (market capitalization) is the value of a company. Comparing just the share price of two companies is meaningless.

[if !supportLists]3. [endif]Theoretically earnings are what affect investors' valuation of a company, but there are other indicators that investors use to predict stock price. Investors' sentiments, attitudes, and expectations that ultimately affect stock prices.

[if !supportLists]4. [endif]There are many theories that try to explain the way stock prices move the way they do. Unfortunately, there is no one theory that can explain everything.

Major government policy change or some major events can create uncertainty and concerns among investors, and you know what it can do to your retirement savings. Therefore, you need to learn how NOT TO LOSE MONEY from the next market fluctuation.

Billionaire Warren Buffet once said, “Rule No. 1: Never lose money. Rule No. 2: Don't forget rule No. 1.”

We all understand the importance of having financial safety and security in our lives. To achieve that point of financial safety and security, it involves a sure understanding that your money is really safe along the way. So, the question for you is how safe do you think your money is right now?

I spoke to a 66 year-old man a couple of weeks ago who lost all his retirement money back in 2008 when the market crashed. He had saved his money for over 33 years and was very sure that he would retire very comfortably at age 60, but that dream is now gone. At the time, he invested all his retirement money in the markets assuming that it was “safe enough,” and he went along with that assumption until one day, he lost them all. You need to understand that it takes only “one day” to lose everything you’ve worked so hard and so long for because you have not learned the art of never lose money from market volatility.

Most working Americans don't understand that their 401(k) and IRA contributions are going to unseen accounts where the “Allocation of Holdings” which typically include stocks, bonds and mutual funds with valuations that we assume will always increase. You will get consolidated summaries that indicate “Beginning Value” and “Ending Value” and “Change in Value over Time.”

However, those values are not guaranteed, and if you have had a retirement account for any length of time, you know that those accounts can fluctuate quite dramatically. Reports show that the average U.S. workers lost about 24.3% of his or her 401(k) when the stock market crashed in 2008. So, someone with a retirement account of $150,000 in 2008 lost a fast $36,450 without much warning.

It is important to how much return you can gain, but more importantly how much gain you can keep. Can you imagine if your retirement savings can never go down? What if you never had to feel helpless when the market crashes? What if you could protect your principal, hedge against portfolio risk, avoid paying investment fees and take income as needed for the rest of your life?

The key of never losing money due to market volatility requires a vehicle that will maximize the upside and minimize the downside of your savings and retirement holdings. It's basically reducing your risk and protect your principal against the hazards of history, the extremes of government regulations, the volatility of the world, and the craps table of the stock markets.

So if you are one of those people who are tired of not having certainty and always hoping and praying that your money is safe, you now can be sure that your retirement savings will be protected in a protected place and earn a reasonable rate of return and always have access to you money. Your retirement should be your number one fear because one day, you will not be able to work and you need INCOME!

At Perpetual Wealth Group, LLC., we educate and coach individuals and business owners on how to best position themselves for financial success. Please visit our website and learn how not to lose your retirement savings again.

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