Investing in Bear Markets

What should you do when a bear market hits?

The truth is the answer is different for everyone. It depends on your situation, your risk tolerance, and more.

There’s no quick and easy answer to that question. But here’s what I can tell you.

You can take action to prepare yourself. And you may even discover some new opportunities.

Bear markets can bring new, attractive entry points.

With the right outlook, you may just find new opportunities in bear markets.

Here are the two things we know for sure about bear markets:

  1. We can never predict exactly how they’ll happen, and we can never predict how they will evolve.
  2. We can only figure out those things in hindsight.

That can be unnerving to consider. But here’s some good news.

You can gain a lot of peace just from knowing some fundamentals about bear markets—and what to do when they happen.

Remember, bear markets are part of a healthy market cycle.

When they (inevitably) happen, focus on the long-term view. Bear markets have historically had a shorter life span than bull markets. And in past market performances, a bull market has followed a bear market. Though these past results can’t guarantee a future, these patterns point to the value of a long-term perspective.

You know what you shouldn’t focus on during corrections and bear markets? WHAT YOU THINK OTHER PEOPLE ARE DOING.

It’s easy to lose focus in the chaos of a bear market.

In fact, behavioral economists say we’re primed to look for the negatives after a market downturn.

When that happens, we tend to seek out more negative information. When we find it, we start to feel threatened. It’s human nature.1

You know what can help?

Knowing the facts. And knowing what to focus on during bear markets. It’s one of the best ways to stay level-headed—and it can lead to better decisions.

Are you ready to get the facts about bear markets?

Click here to learn more with our Visual Insights Newsletter!

 

 

Garrett German offers products and services using the following business names: Harvest Wealth Group – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Harvest Wealth Group.

Representatives do not provide tax or legal advice. Please consult with your tax advisor or attorney regarding your situation. Trades cannot be communicated to your Representative by e-mail, fax, or regular mail as the transaction may not be executed on a timely basis. Please contact your Representative by telephone to request trades and do not use e-mail to send confidential information or time-sensitive instructions. Performance quoted does not guarantee future results. Please refer to your regular periodic statement for complete information.

1https://www.scientificamerican.com/article/how-to-bear-a-bull-market-the-psychology-of-volatile-securities-trading/