How to Keep Your Cool (and Save Money) During a Bear Market

Have you checked in on your retirement accounts lately? Did they make you want to cry?

If so, you’re not alone – in fact, most are experiencing some investment woes at the moment. That’s because we’re experiencing what’s called a bear market. No, not a grocery store that sells teddy bears (but we wish). 

Let’s take a look at what a bear market actually is, what you can expect in the coming months, and ways you can keep your cool during these tremulous times. 

What is a Bear Market?

A bear market happens when the stock market is losing value quickly – specifically, we enter a bear market when securities prices are down at least 20% from their most recent high. It’s the opposite of a bull market, in which prices are on the rise. 

There have been more than a dozen bear markets since World War II, each with their own unique circumstances. However, there is at least one common theme in bear territory: economic anxiety and pessimism. 

The Long-Term Outlook

While those stats might have you feeling un-bear-ably frustrated, there is some good news. Each and every one of those previous bear markets has bounced back in an average of 359 days.

What does the historical data tell us we should do during times like this? Sit tight, don’t panic and basically hibernate until the market recovers – which is much easier said than done (especially for those quickly approaching retirement). Luckily, we’ve got some tips to help you stay upstream along the way. 

3 Ways to Keep Your Cool (and Save Money) During a Bear Market

Our top three tips for surviving and thriving this bear season: live, laugh, love. 

Just kidding – but we do recommend that you refrain from panic-selling, diversify your investments and start a conversation with a financial advisor. 

1. Don’t panic-sell

Many investors see their account values plummeting and want to pull their money out of those investments – but this is actually a big no-no. 

You see, you don’t actually lose any money if you hang onto those investments and ride out the bear market. You take the loss when you sell your securities for less than you originally purchased them for. 

As we stated above, things are most likely going to get back to normal, it just takes time. Your best bet is to remain calm and keep your eyes on the prize. 

2. Diversify your investments

This is solid advice, bear market or not. A diversified portfolio helps protect you against unnecessary risk. The idea is that if one stock plummets, you have other securities or assets in your portfolio to balance out that loss.

Even though the current markets are firmly in “bear” territory, that doesn’t mean that every stock is down. Diversification allows you to take the ups and the downs in stride.

3. Speak with a financial advisor

Lastly, it’s important to keep in mind that your financial advisor is here to help during situations like these. They can answer your questions, calm your anxieties and help you stay on track to reach your long-term goals. 

In the event that you need to restructure, a financial advisor can also help you re-evaluate your plan and determine which action steps may be appropriate.

To recap, when the bear market starts growling, remember these three steps: Remain calm, diversify your portfolio, and work with a financial advisor. 

Keep Your Cool with Lasso

Bear markets got you feeling grizzly? Lasso is here to help you survive and thrive during the best and worst of times. Click here to download Lasso, create a financial plan, and anonymously connect with your financial professional. 

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