Getting There


VIDEO: Behavioral Finance – Investing in a Bear Market


Behavioral Finance Video by Jay Mooreland, MS, CFP®

Investing in bear markets can be scary.  Anxiety, concern, and fear are normal to feel. Negative outlooks often accompany bear markets, such as increasing inflation, interest rates, and possibility of a recession.

Investors may be tempted to sell their investments and transform a temporary market selloff into a permanent loss for their portfolio. At times like these, maintaining the right perspective is crucial.

Maintain a Disciplined Perspective

Warren Buffett is full of wise advice and perspectives. The following perspective is especially timely:

“The market is a device for transferring money from the impatient to the patient.”

That is what is happening right now. And historically patient investors have been well rewarded.

For instance, since the pandemic hit, markets have returned 44%. That includes the 35% Corona Crash and the current bear market losses to date (over 20%).

Stock investors saw their portfolios drop over 50% in the Global Financial Crisis, yet those who hung in there have earned 221%, even after the current bear market loss.

Developing Patience

Patience is both a virtue and one of the greatest skills investors can develop. The challenge is that patience can deplete over time. If you feel your patience dwindling, let’s talk about perspectives and strategies that can help you refuel your tank, and perhaps take advantage of everyone else’s fear.

©2022 The Behavioral Finance Network

S&P 500 Index through Sept 23, 2022 and include reinvestment of dividends. Performance calculated at Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. All indices are unmanaged and may not be invested into directly.

 | Categories: 

Related Posts
  • Celebrating Your Financial Freedoms
  • What If You Knew …
  • Uncertainty, Outcomes and Our Decisions
  • How to Invest at All-Time Highs

Jason Wade