Here’s the bear- in my front yard. I’ll be glad to see the backside of another bear too- the bear of 2022!
We invest according to your time frame, growth and income needs. If we have done financial planning, and there is a mismatch between your goals and your tolerance for market fluctuations, something may need to change.
For example, you may need to get more comfortable with short-term volatility in order to achieve long-term growth, or you may need to change your spending or other expectations to stay comfortably invested.
That said- if your goal is “growth”- it should stay growth. This year, that commitment has been put to the test.
“Everyone has a plan until they get punched in the mouth.”- Mike Tyson
Many people disregard the advice of investment professionals and sell or change strategies during bear markets. This is why it can seem there are far more failed or flagging investors than successful ones.
Worse, investing in general is often avoided to the detriment of many people who need to grow their assets to keep up with inflation, taxes, and reach other goals over a 2-3 decade retirement.
For these folks, economic hardship can occur at a time of life when they’re least equipped to handle it.
Chris Glass of Zack’s writes about lessons learned in the transition from bear to bull in 2009: “in the early days of the new bull market, the news was bad and market commentators routinely called it another bear market rally. Investors should expect to see and hear this negativity in this cycle, too.”
If you are having a hard time being patient amidst the negativity, just remember what’s potentially at stake in the handoff between bear and bull markets- a dynamic recovery.
Investing is counterintuitive, emotional, and difficult at times. Our human experience plays out in days and months, and the domain of lifetime planning and investment is years and decades.
That is why listening to a professional, who will no doubt advise you to stick to your carefully designed plan, can be extremely consequential.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing involves risk, including possible loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Securities and Retirement Plan Consulting Program services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Investment Advice offered through Western Wealth Management LLC, a Registered Investment Advisor. LPL Financial, Kennebec Wealth Management LLC and Western Wealth Management LLC are separate entities.