3 Strategies to Avoid in a Bear Market

The major U.S. indices are considered to be in a bear market.

You may have heard the term bear market, but don't really know what it means.

One definition is when the markets fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.

Where does the terms bear market come from?

Some think it is derived from the way bears attacked their opponents, which is swiping down. That "down" motion metaphorically relates to the movement of a market.

I've been discussing with clients five strategies to AVOID during bear markets.

To learn about the last two crucial strategies to avoid let's discuss your portfolio. Click here.

Here are three to get you started..... 

1. Many investors wish they went to cash with their portfolio at the beginning of the year.

As the markets keep declining investors may eventually “give up” and then go to cash.

However, rather than selling everything it might be better to get rid of your loser and high grade your portfolio. 

2. Everyone knows the energy sector is the bright spot of the markets this year.

You might be thinking to load up because the energy sector is doing well, but this is more of a bet and not portfolio management.

Oil is strong now, but in a global recession and with the eventual end of Russia’s aggression into Ukraine, oil is not guaranteed to stay high forever.

3. Don’t let your emotions dictate your investments.

Obviously, that is easier said than done, but my approach is to have a plan whether the markets are going up or down.

Do you have a plan for your portfolio in all market conditions?

Start your own customized financial plan by clicking here. 

 

Adam Pukalo
Portfolio Manager, Securities
Commodities Futures Advisor                   
204-982-0010 | 306-525-7664