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The Bear Market Playbook Part 1

Updated: Mar 15



Bear Market Playbook Transcript

We are officially in a bear market. So I wanted to put together a video series called the bear market playbook. Let’s go.


Okay, first of all, I am not excited about the fact that we are in a bear market. Bear markets absolutely stink. But that is the reality. The reality of any investors lifecycle in the markets is we’re going to deal with bear markets from time to time. And it’s part of the price of admission.


Think of bear markets like that really painful pruning process that we must endure so that we can eventually expand in a enjoy the future growth of our assets. So I wanted to just reach out first of all, until each and every one of you that may see this video, if you’re worried right now, if you’re concerned, we get it. I understand and you are not alone.


If you’re working with a financial advisor, I highly encourage you to reach out, ask for a review of your plan. Ask for reassurance. That’s one of the main goals of a financial guide / Financial Advisor is to be with you through thick and thin help you make sure that you are on your path, still on your plan, and that you’re continuing to make positive growth towards your long term financial goals.


The very first thing I want to bring to the table is to help you understand a little bit about what is going on with you right now, if you’re worried if you’re concerned, if you’re stressed.  Anxiety plus uncertainty equals fear. Our human brains, our mind, we are wired to crave certainty, we are wired for that. And so anytime things feel very foreign or very uncertain, we get nervous.

And when we have that nervousness, that anxiety plus the uncertainty, we get afraid. Fear is one thing that we just have a hard time dealing with physiologically, right? We get stressed out, then we begin to focus on the very thing that is causing the fear media, financial media knows this.


This is why we constantly get the red updates the red tickers, the alerts on our phones, on our smartwatches on our computer screens in our email, inboxes, constantly confirming and reconfirming over and over and over again, that we should be afraid– Be very afraid because the sky is falling.


I want you to know, I understand that. But that’s also part of the problem. One of the things that continues to hinder good investor behavior is the fact that we cannot seem to divorce ourselves for just a moment of what’s happening any given day, any given moment in the markets. It’s called, you know, the tyranny of the present, if you will.


And so I want to encourage you that maybe this is a time to just take a breather, turn off the cable news, turn off the alerts on your phones, turn off the alerts on your smart tablets, your watches, anything that’s going to constantly prod you and let you know, hey, markets are in distress, you need to be panicking, I highly encourage you to think about taking a break from that it’s not because you don’t care is not because you shouldn’t care. It’s because it’s only going to make you more and more stressed out.


Avoid Knee Jerk Reactions

The second thing I wanted to point out is avoid any kind of knee jerk reaction that you may be thinking about. Things that may just completely deviate you from the plan that you have. So first, I should say I hope you have a plan because I believe firmly that you should have a plan before you’re investing anything. You should have a plan of action on how you’re going to invest your dollars. So I should say that first.


But before you take any major action or have a knee jerk reaction, I highly encourage you to think about it, think it through. And usually if you sleep on it, give it a couple of days, you’ll ultimately calm down and realize that you’re doing the right things you’re doing the right actions you need to be doing to keep you on plan.


If you have a plan, now’s the time for you to think about revisiting that plan. Do you need to go back and look at what you’re doing?


So you can be reassured that you are on the right path, you have the right asset allocation that your retirement plans are on track that your cash flow plan is taken care of for the next year to two years that you feel confident. So look for a way to have a review, review your portfolio, review how you’re investing, review your overall plan and make sure that you’re on track.


Look For Investing Opportunities

Lastly, remember times like these give us opportunities. If you are a young investor or if you have capital that’s sitting on the sidelines, we are approaching the times where you want to be thinking about buying. Think about opportunities for you to put those assets put that capital to work.


A major sale is going on, and this is talked about all the time in investing books. The stock market is the only asset in the entire world where when the price is going up, everyone wants to buy more. And when the prices are going down, people want to sell and have no interest in buying.


And that is the beginning of what we’re starting to see right now the stock market is selling off from its previous highs, we’re looking to start seeing buying opportunities. So that is something that anyone if you’re interested in investing capital, if you’re interested in building wealth, growing your assets, now’s the time for you to be paying attention.


Avoid Fear Merchants

I’ll share one final bonus thought with you. One of the things that happens in a bear market, just like it happens in a bull market is people come out of the woodwork and want to take advantage of your emotions. In a bull market, people want to take advantage of others’ as greed. In a bear market, people want to take advantage of fear.


Be mindful of anyone that’s coming out and telling you that economic Armageddon is upon us and the only way that you can save yourself from this type of financial pain is to buy XYZ product or invest your money into XYZ product. That is simply a technique called fear based selling.


It is highly, highly effective because as I said at the beginning of the video, when we are fearful our minds tend to give us tunnel vision. And we focus in on the thing that is creating fear, uncertainty and doubt. And we will do just about anything to make that pain to make that uncertainty go away.


Then we become at risk of making a knee jerk or taking a knee jerk response reaction. The folks that are doing this know it so they are going to talk to you about ways that you can put your money to work and not worry about market risk. All these types of things. I want you to be mindful and diligent.


I am not against making moves that will put you in a better position I’m not against in a move that have in products that have a meaningful purpose and can be used within the context of a plan. What I am against is product sales that masquerade themselves as financial planning because that is not what financial planning.


That’s not what financial advice is all about. Be mindful of that. Be diligent and guard your minds. If you need to turn off your alerts for a while or if you need to divorce yourself from cable news, I think that is a fantastic idea.


But just be mindful of that it’s summertime. Enjoy the hot heat the warm weather, enjoy your vacations, find something that you can look forward to and build upon. And lastly, if you need to reach out for guidance, if you need to reach out for a review, if you want to talk about anything that’s going on, now’s the time, have those meetings with your financial advisor, reach out to our team if you don’t have somebody or if you work if you work with us, reach out to us. That’s what we’re here for. We’re looking forward to the opportunity to speak with you.

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