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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12460″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

Definition: A bear market is when securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment. The average bear market can last around a year.

The average “bull market”, where prices are increasing, last over 4 years.

  1. Bear markets create buying opportunities. Many good companies are “on sale” during bear markets, creating buying opportunities you would not normally have in an overvalued bull market.
  2. Bear markets create balance. It’s healthy and keeps values from overextending. If we never had bear markets, values would never be in check. A bear market brings balance back into markets.
  3. Bear markets remove inexperienced day traders. Day traders get a hard lesson about gambling in stocks when bear markets occur, and many quit after they have run out of money. This helps create a less volatile market, which usually for a few years until the markets reaches a new high. At which point, day traders usually return.
  4. Bear markets prune out weak companies. This can result in a much healthier market with stronger companies.
  5. Bear markets push away short term investors. Investing involves risk. It is not for those that cannot handle short-term volatility for a few months, or even 1-2 years. Investing is meant to be for the long-term measured in many years, not months.
  6. Bear markets allow companies to buy back their own stock at bargain basement prices and take control again and possibly even consolidate with other companies. Many companies buy back their stock during a bear market or buy a competitor which creates synergy and a stronger company.

The 2 main things causing the present bear market are…

  1. Inflation caused by supply side issues lingering from the pandemic, the Ukraine/Russia war, and high oil prices.
  2. Artificially low Interest rates returning to normal. Higher rates, given time, should cause price declines in things like real estate to offset higher rates and slow down inflation.

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12461″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Jenna Peters

What we can learn from these magnificent animals and translating it over to a bear market.

Bears are fearsome creatures because of their brute strength and ability to protect what they believe is theirs – their territory, their kills, and their offspring. I’m sure you have heard of the phrase “Mama Bear” and know if you ever see a bear cub to immediately back up and make some distance. Mama bears are notorious for their ability to protect their young no matter what it takes. They won’t back down until the threat is gone, and they know that their cubs are protected.

While bears are lethal, powerful creatures, they are also an animal that is full of so much playfulness and wonder. Right after college, I worked at an animal rescue organization that took care of both grizzly bears and black bears. While I would never want to be caught inside their cages with them, I absolutely loved watching these creatures swim and play from the outside of their enclosures. Bears are some of the most playful animals that you will ever set eyes on. They love the water, balls, large ropes, and anything you can throw in with them as enrichment. They have a tremendous amount of intelligence and personality.

They are like large, playful dogs (that you would never want to get in a personal tug of war with). I have watched documentaries of polar bears playing with other polar bears that they have never met before. These two polar bears are slipping and sliding in the middle of snow and ice to their heart’s content. It’s truly magical and breathtaking. So while a bear can be immensely aggressive and brutal, there is a beauty and respect to these animals that I have been able to personally witness while being a caretaker for them in captivity.

The same can be said for a bear market. A bear market can come on intense and fast, just like a bear, pushing down on you and your finances for a good while. However, if you trust in your survival instincts, you can and will survive. If you meet a bear in the wild, you have trees to climb, bear spray, playing possum, and more ways to survive. A bear market, like its namesake, can be strong and overwhelming, but you don’t have to be caught unprepared. You have choices if you go in prepared.

There’s also a beauty and strength to a bear market that allows you to sit back and contemplate all of the correct steps you have taken to get to this point. Bear markets are needed. Without lows, how can there be highs? Without the strength and aggression of a mighty grizzly, how could we fully enjoy the playfulness and intelligence of this animal? With everything comes pros and cons, ups and downs. There is no light without darkness, just like there is no bull market without a bear market.

Instead of looking at down times as such a negative aspect, maybe start to see it as a learning process. Respect what your money and advisors are doing for you and have done for you up until this point. You are prepared, even if you are nervous and don’t feel it. You don’t fight a bear back with aggression and wrestle it head on. Believe me, you’ll lose immediately. Instead, you fight a bear in the wild by waiting it out in a tree or from another location until it leaves. You are patient and give the animal respect, just like you would a bear market.

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12459″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

The foundation. God owns it all.

“The earth is the Lord’s, and everything in it, the world, and all who live in it.” Psalm 24:1

There is a time for everything. A time for economic booms, busts, and booms again.

“There is a time for everything, and a season for every activity under the heavens.” Ecclesiastes 3:1

It’s time, not gambling and trying to time the markets, that creates long term wealth

“Dishonest money dwindles away, but whoever gathers money little by little makes it grow.” Proverbs 13:11

The month to month value of my portfolio is not tied to my self worth

“I am not saying I need anything. I have learned to be happy with whatever I have. I know how to get along with little and how to live when I have much. I have learned the secret of being happy at all times. If I am full of food and have all I need, I am happy. If I am hungry and need more, I am happy. I can do all things because Christ gives me the strength.” Philippians 4:11-13

I will not allow social media or professional doomsayers with conspiracy theories, deceptions, lies, and alternative motives to influence me.

“Be alert and of sober mind. Your enemy the devil prowls around like a roaring lion looking for someone to devour.” 1 Peter 5:8

I believe in the Biblical guidelines of diversification.

“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” Ecclesiastes 11:2

I will pray and seek God’s word over social media, news, the internet, and TV driven by fear and emotions.

“Whoever dwells in the shelter of the Most High will rest in the shadow of the Almighty.” Psalm 91:1

I refuse to live in a spirit of fear over what the markets are doing from day-to-day

“For God has not given us a spirit of fear, but of power and of love and of a sound mind.” 2 Timothy 1:7

I choose not to go it alone

“Plans fail for lack of counsel, but with many advisers they succeed.” Proverbs 15:22
“If two lie down together, they will keep warm. But how can one keep warm alone? Though one may be overpowered, two can defend themselves. A cord of three strands is not quickly broken.” Ecclesiastes 4:11-13

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12462″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

What’s causing the turbulence in the markets?

  1. The Ukraine Russia War, fear of escalation, and possibly the use of nuclear hypersonic missiles
  2. Record High Inflation from too much government stimulus
  3. Fears of what higher interest rates and a tighter money supply could do
  4. The Real Estate bubble
  5. Political leaders that seem incompetent when doing their job
  6. Computer Chip shortages for manufacturing, especially for vehicles which is the second-largest purchase most people make behind buying a home, and its very noticeable
  7. Continued Supply Chain disruptions from leftover Covid
  8. A shortage of workers to fill needed vital positions in the marketplace even with unemployment at record lows

How should you invest in a time like this?

  1. Invest in companies we all need to survive a normal lifestyle. For example, ones that produce food, clothing, shelter, technology, energy/utilities, healthcare, transportation, etc.
  2. Use a well thought out, long term investment strategy
  3. Understand that turbulent times are nothing new, and they will always come along every 2-3 years.
  4. Keep emotions and feelings out of investing.
  5. Be leary of professional doomsayers who make a living from selling fear. They take advantage of people during turbulent times by selling high commission products like gold and silver, high fee indexed annuities, or even a subscription-based newsletter you have to subscribe to. These professional doomsayers are all over social media, the internet, television, and even mail out thousands of seminar invitations offering a free steak dinner to lure you in. Those seminars cost them thousands of dollars, but just the sale of 1-2 high commission annuities makes up for it to the people doing this.
  6. Look for investment opportunities instead of running from them.
  7. Stay cautious of the tendency to chase returns. During turbulent times something will always be way up when everything else is down. Be careful of buying high.
  8. Stay patient. Stay patient. Stay patient. It is not a time to panic!
  9. Think long term in 3-10 year increments verses 3-24 month increments
  10. Seek experienced investment counsel from someone that has been through several turbulent times many times before. This may mean someone older than you.

In my life alone I have seen: the Vietnam War; Watergate; President Nixon’s resignation before he was impeached; the oil embargo where just getting a gallon of gas for your car was nearly impossible; President Carter’s years of double-digit inflation; Black Monday and the stock market crash in October of 1987; the collapse of the Real Estate markets in the late 1980’s that lasted for many years; the internet bubble crash of the early 2000’s; the real estate crash again in 2008; and the temporary market crash from COVID just a few years ago.

Realize that Turbulent times are a normal part of life, but investing and staying invested during them can be difficult if you’re doing it alone, so DON’T![/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12465″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

Initial Investment Year 1
($100,000 invested all in one objective for 20 years)

$100,000 grows at 5% to = $265,330

Initial investment Year 1
($100,000 diversified in 5 different objectives for 20 years)

Aggressive Growth: $20,000 grows at 11%: $161,246
Growth: $20,000 grows at 9%: $112,088
Moderate/Balanced: $20,000 grows at 5%: $53,066
Conservative: $20,000 grows at 3.5%: $39,796
Ultra Conservative: $20,000 grows at 2%: $29,719

* TOTAL: $395,915

* NEARLY 50% more in a diversified portfolio

“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” Ecclesiastes 11:2

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12464″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

The only guarantee in the stock market is that it will have ups and downs. This is true in any market, not just the stock market. So what should you ask yourself when the markets are in a downward trend? Take a look through the following seven questions to help you weather the storm:

  1. Will I need everything in my diversified investment portfolio in the next 1 to 3 years to live on?
  2. Do I have enough funds that are NOT in stocks and equities to last me for the next 3 to 5 years to live on while waiting for the stock portion of my portfolio to recover? Note: A moderate portfolio has as much as 40% to 60% in fixed income – that you can draw from – which allows the stock market portion of the portfolio to recover over time.
  3. Am I smart enough to perfectly time the market by getting out at the perfect time and getting back in at the perfect time? Note: just missing 3-5 days of positive market returns in a month can affect overall performance dramatically.
  4. Do I believe every day things I use and am invested in will no longer be needed? i.e. technology, healthcare, medicine, utilities, gas, transportation, food, shelter, clothing companies, etc.
  5. Will I allow “short-term thinking” to get in the way of long-term success?
  6. When the markets are down shouldn’t I look at it as a buying opportunity instead of a selling one?
  7. Do great investors like Warren Buffet go with the crowd and run away from the markets when they are correcting, or buy stocks at lower prices?

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12458″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

  1. Establish written financial goals: PROVERBS 20:5, PROVERBS 21:5
  2. Seek wise financial and investment counsel: PROVERBS 19:20
  3. Cultivate a long-term perspective: LUKE 14:28
  4. Diversify your portfolio: ECCLESIASTES 11:2
  5. Consistency is crucial, don’t make haste to “get rich quick”: PROVERBS 28:20-22
  6. Avoid risky investments if you can’t afford a loss: ECCLESIASTES 5:13, 15
  7. Avoid high leverage: PROVERBS 22:7
  8. Monitor your anxiety: PSALM 131:1
  9. Establish limits on the amount you invest: PROVERBS 15:16, PROVERBS 30:8
  10. Share and discuss decisions with your spouse: GENESIS 2:24

REVIEW THESE SPECIFIC QUESTIONS BEFORE YOU MAKE ANY INVESTMENT DECISIONS:

Could I be investing unwisely due to any of the following attitudes?

Greed: I TIMOTHY 6:9, PROVERBS 22:9
Pride: PROVERBS 16:5
Fear: PROVERBS 18:11

Am I presuming on the future and creating anxiety for myself or my family? MATTHEW 6:25, PHILIPPIANS 4:6-7[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]

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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”12463″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]By Bob Barber, CWS®, CKA®

“Know well the condition of your flocks, and give attention to your herds, for riches do not last forever; and does a crown endure to all generations?” Proverbs 27:23-27

During a Bear market, it is very important to update your Financial Plan to see how it is handling the stress. When planning is done during bull markets we always compensate for bear markets that are inevitable by planning with overall returns that are 30-40% lower than normal. It’s kind of like running an engine at a very high-stress level in a factory to see if it can handle the heat in the real elements, but nothing is like the real thing.

So far, every financial plan we have updated recently has not been affected in the long term by the bear market we are presently in, but I still believe it’s always a good idea for a checkup. The eMoney financial planning system we use updates all plans daily with new values so we can run a test in seconds. A 15-minute phone call is all it takes for a quick checkup to see if anything needs to be adjusted to your financial plan.

A client just a few weeks ago asked with all the inflation if there was any way that they could withdraw a little more from their portfolio to compensate. I ran the numbers, and the answer was yes. They were relieved and surprised to hear this with the bear market we are presently in, but we were prepared for them.

Set up your appointment now to:

> Plan Forward
> Update
> Compensate If Necessary

It’s always a good idea to check the engine after a drive in the desert or a flood for any damage![/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]

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