EC Bear Market Awareness Checklist

Try not to panic. I know. Easier said than done.

Portfolio erosion can cause great distress, especially for newly-minted retirees who require withdrawals to survive. I’m not going to minimize the scary feeling. I respect it and believe in the awareness stress creates. However, utilizing emotions instead of rules to exit markets can jeopardize the health of your portfolio.

It’s understandable if the volatility is just too much. In that case, selling stocks down to a level that allows you to become less emotional is acceptable. Make sure to discuss an exit strategy with your financial partner. If advised to hold on for the long term, or your requests for liquidation are minimized, then it’ll be up to you to take control and do it yourself. At the least, seek out a second opinion immediately. Preferably from a registered investment advisor and fiduciary such as Clarity.

As I wrote for RIA back in October:

One lesson to never forget: Markets can and do indeed prosper during tough economic cycles due to fiscal and monetary stimulus. Markets falter when rates increase.

As the Fed continues to drain liquidity from the system, target a neutral rate, normalize (whatever that is), all of us as investors may finally understand how painful it can be for stocks, again.

I continue to stand by this premise.

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Kurt Benson 1 year ago Member's comment

Good stuff, thanks.