In November of 2022, I wrote a blog titled "Bears and Bear Markets." The market had fallen into bear market territory about the same time a roaming bear had decided that his new territory included my property.
Like dealing with a bear market, I did my best to keep my cool, but over time a bear with bad behavior can wear on your nerves. Well, now it's June 28, 2023, and it looks like the bear has left—hopefully, both of them.
Last year's autumn "fall" out could very well have been the bottom of our last bear sighting for a little while at least. Ironically, there have been no bear sightings or incidents at my home in the last few months. I'm feeling equally optimistic on both fronts. Just maybe this timidly rising market has pushed out the problem bear. There is no predicting the future, but in all probability, the worst of this recent bear visit is behind us. However, I still won't leave melon rinds on the deck.
Maybe you aren't thinking about the bear anymore. Now that the talking heads on TV have you focused on the "R" word, conditions seem to be shaping up for a recession, but that doesn't necessarily mean the bear will come back. Just like when encountering a wild bear, your behavior matters. Recessions are a real thing and do cause additional economic stress. But just like bears, they are not all the same. I'm hoping for a small one, if any at all.
One of the key components of a recession tends to be job losses. The labor market remains tight and has been so for some time. Both recessions and bear markets are a perpetual part of the economic and market cycles. You only have one practical question to ask yourself. "Am I prepared?" If you are unsure or answering "no," then exploring preparations would be a prudent course of action. Market volatility can open up investing opportunities for investors with long-term time horizons. But for those much closer to wanting or needing their invested assets, you owe it to yourself to take action.
Suppose you decide to take a vacation in Yellowstone. It's hard to imagine being unaware of the risks that bears present to visitors - particularly unprepared visitors. If you are nearing a point of a life transition like retirement, prepare for the inevitable encounter with a bear market and probable recession.
Contact your advisor and confirm that you are positioned so your needed or projected income won't be put at undue risk during a deep or protracted market downturn. Unlike an encounter with a wild bear, your ability to outrun your neighbor isn't going to help.
We're also here to help! Feel free to contact us at BPG Planning anytime with any questions.