Is This The Beginning Of The Much-Anticipated Bear Market?


With the market gyrations over the past month, the big question is simply this: are we looking at the beginning of a bear market, or is this nothing more than a minor blip as markets continue their path up?  While I’m optimistic that the market has another year or two to run, really…who knows?

This is a really important question, as it could significantly impact your portfolio if you are following a “buy and hold” course.  If we are looking at the beginning of a bear market, a buy and hold investor could potentially lose 30% – 50% of their portfolio (remember 2008?).

On the other hand, if it is just a blip on an upward trending path, you may do well.

What you should be considering is how winning investors react to events like we’ve seen over the last week.

Winning investors ask themselves a couple of very important questions. The answers to these questions guide their actions.

Question #1: What would the impact on your lifestyle be if your portfolio lost 30% or more? What would the impact on your lifestyle be if your portfolio made 30% or more?

Note: usually the answer to this question is a big impact if there is a loss, and a small to moderate impact if there is a gain.

Question #2: Which one is more likely to occur at this stage?

Do you think it is more likely that the markets will gain 30% or more or lose 30% or more in the near future?

This question is important as it gives you a feeling for what is more likely possible to occur.

Question #3: This is SUPER IMPORTANT – What if you are wrong?

Looking at the results of your planning if you are wrong about your expectations is a key ingredient to successful investing. Always remember the old adage, hope for the best but plan for the worst.

If you would like to talk to our team of Retirement Planning Specialists about your planning, please feel free to pick up the phone and call us at (215) 657-9200 or toll-free at (800) 377-9967. 

 

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