Top 3 Mistakes to Avoid During A Bear Market
There’s no doubt we’ve entered a bear market. Now that our economy and stock market are feeling the COVID-19 hit, many people may start to panic and make impulsive decisions that may not be beneficial in the long run. Instead, learn from past mistakes and avoid them during the current bear market. These are our top 3 most common mistakes to avoid during a bear market.
1. Failing to Plan
In an ideal world, you’ll want to create a market protection plan before a bear market hits, but if you haven’t done that, it’s not too late. Meet with an experienced financial advisor to discuss strategies to mitigate losses and protect your assets and retirement plan. Without a plan, you may become victim to performance chasing and market timing, which can be detrimental to your portfolio.
2. Trying to Time the Market
This will seldomly work. Many inexperienced investors will look for the quickest profit, without realizing that long-term success takes time and skill. Though you may make quick cash, if you’re lucky, it’s likely that it won’t last for long. Even the best investors shy away from this tactic because of how unlikely it is for it to work. For the best potential results, ensure your investments are goal-oriented and align with your needs and risk tolerance. Meeting with a financial professional may help you protect and maintain your financial goals.
3. Obsessing over Losses
It’s difficult watching your portfolio drop, but if you have a well-crafted plan, you need not worry. Losses are inevitable in investing and depending on your risk tolerance, you may experience considerable losses. Afterall, you’ve probably seen larger gains during prosperous market times. Instead of allowing your worries to take over your portfolio, create a “check-in” routine and strictly adhere to it. If you’re still not satisfied, consider speaking with your financial advisor to reallocate or devise a new strategy.
*BONUS TIP* Doing Nothing
This maybe among the most harmful. If you don’t have a proper market recovery strategy in place, then you’re at a higher risk of losing your hard-earned money to the market. Instead, meet with a financial advisor to discuss your options. Already have a plan in place? Consider getting a second opinion; after all, you would do the same for your physical health, right?
At market close today, Dow Jones, S&P 500, and NASDAQ all saw decreases. The Dow declined by 3.12% with a 597.94 point decrease, while the S&P 500 sunk by 2.96% with a 68.22 point decrease, and the NASDAQ dropped by 0.27% with a 18.84 point decrease.
Does your retirement plan have protection features such as a market recovery strategy a WealthGuard protection plan, and a method to repair the long-term effects of the bear on your portfolio? Are you unsure? At RGA, we offer complimentary second opinion services and financial planning sessions. We’ll conduct an in-depth analysis of your current situation, do some research and present our findings, then we create customized strategies based on your needs and goals. To learn more click the link below, call 1-800-467-8152, or email firstname.lastname@example.org to schedule a time to chat.
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