Broker Check

Stock Bear Market Survival Guide

| May 25, 2022

A few years ago we started preparing for the next bear market here. Our advice remains the same today.  Here are some practical tips to get through the bear market.  

1) Assess your risk levels. Now is a good time to revisit your overall investment strategy with your Financial Advisor.  Remember in the 80’s and 90’s and early 2000’s when you actually got paid interest on your money?  A positive side of the Fed raising rates is an opportunity to get paid interest with potentially less risk than stocks.  Your cash can now be earning interest too.  Maybe you can achieve your goals without relying as much on stocks appreciating in value.

2) Consider raising any needed funds now. If you are retired or drawing income from your investments try to reduce or suspend your withdrawals.  Delay large purchases.  The more money you leave in your account can be more money to rebound when the market recovers. In any event always have at least 3-6 months worth of living expenses in cash for emergencies.  Same for needed funds for any other planned short term expenses (vacations, home remodel, large purchases, etc.).  

3) Mentally prepare for the potential of a protracted market downturn so you aren’t taken by surprise or alarmed by the media and the associated sensationalism that surrounds a decline.

Finally, stay diversified, consider rebalancing, and wait for the recovery. Learn more here.

Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.