Bear Market Survival Guide, Ep #87

What's up! It's episode 87 of Payne Points of Wealth and the S & P 500 has had the worst start of the year since 1970 and there's a lot to be concerned about. We've got war in Eastern Europe, we've got interest rates going up, we have inflation at the highest it’s been in literally 40 years. In addition to that, we have China in somewhat of a lockdown. We've got commodity prices starting to come down. What does it all mean? Well, we're going to break it down today. We're going to tell you exactly what we think about the economy, the market. Markets are down over 20% so we're going to talk about a bear market survival guide. Do you have what it takes to survive this bear market? Listen and find out!

 

You will want to hear this episode if you are interested in...

• Clarity is not a friend of the investor [1:43]
• The Fed is doing a good job [4:11]
• When you make the big money in your portfolio [7:17]
• The Tipping Point [9:14]
• How quickly can you turn your investments to cash? [11:57]
• Avoid the sexy pitch [14:11]
• Are you obsessed with dividend-yielding stock? [16:11]
• Hidden Facts of Finance [18:27]

You can't get good prices with good news

The only thing certain about this market is uncertainty. We have recession fears, inflation, hysteria, interest rate concerns, and a federal reserve that told us that the inflation rate was transitory. Now they're telling us we'll tell you when it's done going up and we'll be able to give you a nice soft landing. Sounds like we're gonna have a real bumpy landing! The point is when you get markets that go down this quickly and this hard, generally, there's a snap-back rally at some point, and you don't want to be on the sidelines when that happens.

The way that markets work, and we talk about this a lot, they're forward-looking. The market will most likely recover way before the news gets better. A popular mentality is "Let me just wait and see. Are we in a recession yet? Let's get some clarity." Well, clarity is not your friend when it comes to investing. When the uncertainty is high and we have no idea what's going to happen, that's when you get the best pricing. You can't get good prices with good news. So this bad news is a huge advantage, as you're trying to allocate capital right now, you've gotta embrace the uncertainty.

This week on the tipping point: Bear market survival guide

While it may feel prudent to take action during a bear market decline and sell out of your portfolio in our experience, the long-term results can be disastrous. Selling when prices are down will lead to permanent losses and then you miss the inevitable big recovery rally, which typically comes out of nowhere. Therefore, keeping your head during these extreme periods of volatility is critical to achieving your long-term financial goals. I thought we could discuss our firm's bear market survival guide. 

The number one thing you should always do is reassess your portfolio allocation, especially when you're in volatile times. We tend to let our winners run and ignore our losers so over time you get out of balance. If you're not constantly rebalancing your portfolio with cash flow or with some type of systematic rebalancing annually, you're most likely out of whack right now and the market is not very forgiving guys. It reminds you when you're outta whack.

This week’s hidden facts of finance

• US Federal regulators say 46,000 people have reported losing $1 billion in the Crypto Market in scams since January of this past year.
• The average peak to trough bear market decline is 37.3% over a span of 289 days. Matching that pattern we'd end this pain in this bear market on October 19th, 2022.
• The average peak to trough bear market decline is 37.3% over a span of 289 days. Matching that pattern we'd end this pain in this bear market on October 19th, 2022.
• Thanks to the Stranger Things series on Netflix, Kate Bush has broken three UK chart records with the resurgence of "Running Up That Hill" which last peaked on the charts at #3 in 1985! 

Resources & People Mentioned

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