What to do during a bear market – Presented by Mark K. Lund, Financial Planner

It’s not news to anyone that the first half of this year has been rough on investors. After reaching record levels at the end of 2021, the market has experienced six months of volatility and decline.1 In fact, coming on the heels of such sustained gains has made this year’s retreats even harder to stomach.
The expectation of many investors was that the upward trend would simply continue, maybe flatten a little, but still climb. Unfortunately, the market is more like a roller coaster than a rocket. You can’t count on upward “momentum.” And the sudden drops are usually a surprise.
You’re probably familiar with the two animals used to describe the behavior of the market: the bull and the bear. A bull market is where stock prices, as a whole are rising. A bear market is where they are falling.2 To differentiate the latter from short-term volatility, experts largely agree that a bear market is when broad market indexes experience a decline of 20%, sustained over a period of months.
It’s not an exact measure, but with the major indexes down about 20% from the beginning of the year, pundits are beginning to agree that we are currently in a bear market.
As you can imagine, investors are not taking this news sitting down. Many people are moving
their money out of stocks and into a multitude of other instruments they hope will reverse
their losses—from bonds to precious metals to obscure commodities. However, because the conditions of this bear market are unique (they always are), these alternatives are not behaving as in the past and so are not always bear-proof.
We have been planning for the possibility of a bear market and through diversification have sought to mitigate some of the decline in the indexes, while also preparing you to take advantage of a market recovery. Big gains often happen just a few days each year, and by the time they are evident, it’s too late to “buy in.”
Anthony Isola, head of the Educator/403(b) Division at Ritholtz Wealth Management, shares his advice on what to do in a bear market—none of which has to do with investing.3
First of all, he recommends that you acknowledge the role of your emotions. Because of our natural aversion to loss, the bad feelings caused by a bear market far outweigh the joy we feel when a bull market is producing nothing but gains.
Second, make sure you’re getting enough sleep. The sleep-deprived brain is much more prone to worry. And a lack of adequate rest can lead to many other health issues.
Finally, Isola recommends reading books. Don’t try to wade through something in order to “better” yourself. Find something you truly enjoy. When you’re engrossed in a book, your mind enters what is known as a flow state. By concentrating on one thing, you lose yourself and stop flitting from worry to worry. The effect is a healthy calming.
“Letting inevitable bear markets determine your happiness is a huge mistake,” says Isola. “Get a good night’s sleep, read books for fun, and go for long walks. The market will still be there when you return.”
If you try all that and still find yourself concerned, be sure to get in touch with your trusted advisor.
If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc.
11576 S State Street, Bldg. 1002
Draper, UT 84020

Sources:
1. https://finance.yahoo.com/chart/%5EGSPC
2. https://www.investopedia.com/insights/digging-deeper-bull-and-bear-markets/
3. https://tonyisola.com/2022/06/two-simple-and-cheap-ways-for-managing-a-bear-market/
Disclosure:
The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This
information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary, Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Advisor, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Fiduciary Report. Cities served in Utah are: Salt Lake County, Utah County, Park City, Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork.

Category: Articles, Blog

About the Author ()

Mark K. Lund is the author of The Effective Investor, a #1 Best Seller, and founder of Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisory firm. He has provided articles for or been quoted in: The Wall Street Journal, The Salt Lake Tribune, The Enterprise Newspaper, The Utah Business Connect Magazine, US News & World Report, and Newsmax.com, just to name a few.  Mark publishes two newsletters called, “The Mark Lund Growth Report” and “Mark Lund on Money.”  Mark provides CPE (continuing professional education) courses for CPAs.  You may also have seen him on KUTV Channel 2, or as a guest speaker at a local association or business. Mark provides investment and retirement planning services for individuals and 401(k) consulting for small businesses. In his book, The Effective Investor, Mark exposes the false narrative magazines, media, big Wall Street firms, and most advisors want you to believe. The good news is that Mark will show you that you don’t need their speculative ways of investing in order to be a successful investor. Get a free copy when you schedule your initial consultation.

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