Have you been interested in the current market and how you can navigate through the maze of financial strategies out there?
If so, this is the place for you!
I want to provide you some of the best content that we have to help empower you and help you understand the current market.
I’ll go over updates on the markets in the last year and what’s happening so far this year as well!
Let’s start with the obvious fact we all know.
The market can be fairly unpredictable.
We all know the stock market goes up and down every day. Some times are better than others and some are worse.
There are three different types of negative periods in the stock market.
- A pullback which is -5% to -9.99%
- A correction which is -10 to -19.9%
- And a bear market which is -20% +
WE ARE NOW IN A BEAR MARKET
So I thought it would be helpful to go through the history of bear markets to give us some context in what is happening right now.
Look at each of these years. See what happened. Look at the high to low and then look at the average.
This is what we should expect. This bear market could be better or could be worse, it could be longer or shorter than average but we should definitely be buckled in for at least the next couple of months.
So, what has happened so far in this bear market? Check out the statistics on this table:
Has this bear market ended?
Maybe it has.
Although, a 1 month bear market would be an all-time record. Records are meant to be broken, but I’m not so sure that this is that time.
So many people are out of work and behind on their rent and mortgages. There’s a ton of financial destruction out there right now.
Only time will tell us who is right.
We held a presentation a couple of months ago where we went over all 3 of our investment models. Two are timing models and then there’s this one--- buy and hold and adjust.
The kind of opportunities I am talking about today are perfect for a buy and hold and adjust model. If you want to know more about our other two timing models, please contact me at firstname.lastname@example.org and I’d be happy to go over them with you.
For now, let’s talk about buy and hold.
Buy and hold doesn’t mean to hold forever. You are expected eventually to ADJUST the model and re-balance. To take profits and to take losses from time to time.
On the other hand, what I don’t want you to do is to do day trading where you are monitoring your portfolio every second. You shouldn’t be buying and selling every day.
The opportunities we are talking about are intermediate to long term opportunities--- think 3 to 10 years in length.
That’s why I call it buy and hold and adjust.
We won’t hold them forever, but it should be for a number of years.
Remember, bear market opportunities are approximately once in a decade opportunities.
But where are the very best opportunities?
I think back to the financial crisis and I ask myself—where do I wish I would have invested money back then?
If I could go back and do it again, I would have invested in the worst hit industries and sectors. For example, I would have invested in financial stocks in March 2009 at the very bottom. I know we would have done very, very well.
Tech stocks got creamed in 2000, 2001, and 2002. Then they took off like gangbusters in 2003. Wouldn’t it be great if we bought tech stocks at the bottom of the bear market in 2002?
FOR NEXT TIME
So--- the question I’ve asked myself--- is where are those opportunities this time???
In our next post I will cover opportunities during this market and whether they are the appropriate opportunities for you in terms of your risk tolerance.
Have any questions about understanding the current market? Email me at dave @daviddenniston.com and let’s chat!
Material discussed is meant to provide general information and it is not to be construed as specific investment, tax, or legal advice. Individual needs vary & require consideration of your unique objectives & financial situation. Please consult with your accountant or tax advisor for specific guidance.