Many people will remember September 29, 2008 as a historic day in financial history due to the government’s refusal to bailout financial companies. It was certainly a day many of us will remember as I saw my twitter account filled with readers talking about their losses throughout the whole day.
Instead of talking about my own losses here, I want to share with you some of the activities that we can all do with this current bear market and uncertain economy.
- Add to Your Investments - As the market goes lower and lower, it gets increasingly harder to be bold enough to invest. Even though it works against our emotions, investing while everyone is frightened is the most efficient way to invest!
- Assess Your Risk Tolerance - We all heard about the relationship between time horizon and risk tolerance but a big part of risk tolerance is personal! On a day that the Dow goes down by 7%, it’s a great time to think about whether this makes you lose sleep at night! If it does, your asset allocation is too aggressive and it’s time to change it.
- Stop Reading the News if It Makes You Sick - There are just too many things important in life. Tuning out the news might not seem like the best advice but if it makes you happier, then it is the most important advice.
- Remind Yourself of What You Have - The stock market going down doesn’t mean the end of the world. Your family and loved ones are still beside you so cherish them!
- Sign Up to Win the MoneyNing Starbucks Contest - If you get a Frappucino, the ice might freeze your brain for some temporary relief!
- Examine the Family Emergency Fund - If you still don’t have an emergency fund, don’t you think it’s time to start one?
- Concentrate on the Job - My workplace is so lifeless these days as everyone is more worried about their 401ks then their careers. If you can be the energetic one, you will really stand out and be remembered as a capable employee!
- Do Something Nice for Someone Else - Many people are in a bad mood these days. Make someone happy by doing something for him/her! It would make you feel happier knowing you are helping others too!
- Stop Listening to Your Financial Planner’s New Advice - I am always amazed when the so called experts change the advice they give based on current market conditions. The right adviser will have already made a plan with us through good AND bad times. We need a proactive financial planner, not a reactive one!
- Stop Complaining - Shh!
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I think 3,4,5 are the best ways to cope. We especially all use a brain freeze right now.
But, get out with the family. Play some soccer, basketball, chase each other around.
Get your mind off the turmoil.
I guess I’m just naive, but I don’t think I’ve lost anything (real) until/and if/when I cash out - which I’m not doing anytime soon. What’s in there is all on paper, was bought mostly a long long time ago, and it will be back up sooner or later. In other words, I don’t worry about it unless I need to sell it, which I don’t.
I did buy more!
I sleep well at night - diversified and pretty conservative so I can sleep well.
I just get the weather.
No TV so no news blaring at me
My usual workplace is just me - so I am happy! The rest of the business is not worried as we are in recycling…things tend to do well when the economy turns sour. I’ve been super busy buying junk cars this week - more so than normal. And the boss had a run on buying scrap metal, until that price fell.
I’m ok
And if I smile a lot, others will catch it too!
I sleep well as well. My dividends are still rolling in. I even got some dividend increases recently.
Here’s my simple two-part strategy:
1) get new credit lines while you still can
2) cut spending until it approaches zero
Seriously. My plans for a new car and second home are on hold. To be honest, I’m not sure it will really get THAT bad, but if it ever did, the real objective would be outlasting everyone else.
I agree with Marci. Investment losses or gains are not real,”UNTIL” you cash in.The selling frenzy worldwide has seen a lot of chickens go to slaughter. This bear market has all the connotations of “herd mentality”. A lot of fund managers are getting hedge calls, forcing them to sell.
Individual investors with a diversified portfolio(NOT HEDGED),now have the opportunity to get some real bargain basement prices and wait for the bull to return,which it will eventually.I’m buying and going long.
I understand how viewing losses as “unrealized” can be comforting, but they’re just as good as real if you’re trying to borrow against your assets or prove your net worth (which is to say, very bad).
These are great tips while in a bear market. I especially like your first tip; If you are in a bear market it only makes sense to invest because I do believe that you should invest when the market is low and sell when it is high.