A recent ursine visitor to my home inspired some unique lessons that may be relevant to nervous investors during this year of unsettling market downturns, namely How to Deal With Bears:
- Do not feed the bears. Resist the urge to give market predators more of your money to feast on. This doesn't mean you should avoid looking for bargains in down markets or sell certain investments at a loss to generate tax losses. Rather, it's a caution to resist impulsively giving in to ads or sales pitches for "bear-proof" investment or insurance products.
- Don’t make any sudden movements. Trying to time the markets either to make quick profits or stem losses is nearly always a losing proposition.
- Don’t flee in fear. Unless you absolutely need your money, the worst thing you can do is run for safety in a bear market, since you’ll lose out when the market starts to recover.
- Protect yourself when future visits occur. Sticking with your investment strategy and financial plan may not keep future bears away, but it will help you avoid giving into emotional behaviors that could make matters worse.
Even if you follow these precautions, bear markets can still test the fortitude of even the most experienced investors. In times likes these, meeting with a financial advisor can help you address your fears and affirm your resolve.
This article was authored by Christopher Borden and Jeffrey Briskin. Chris is a financial advisor and Managing Partner located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 508.598.1082 or firstname.lastname@example.org. Jeffrey Briskin is Director of Marketing at Canby Financial Advisors.
This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Talk to your financial advisor before making any investing decisions. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets. Investments are subject to risk, including the loss of principal. Because investment return and principal value fluctuate, shares may be worth more or less than their original value.
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