What does ‘bear market’ mean for your money? Financial planner offers guidance
WICHITA, Kan. (KWCH) - After an unsettling few days on Wall Street, many are eyeing their investment accounts with some unease. The stock market took a dip into what’s referred to as “a bear market.”
What does that mean for your money and what should you be doing? Eyewitness news spoke with a financial planner in an effort to answer those questions.
When there’s more red than green on Wall Street, the impact can be felt on Main Street as people focus on their retirement and other investments. But financial planners say at moments like this, it’s important not just to focus on the bad. The advice from Leading Edge Financial Planning President Michael Proctor is not to panic.
He said to take a step back and to make financial decision with a cool head, not doing anything quickly.
“There aren’t very many moments that force use into selling, selling out of the market at a low,” Proctor said. “Really, that’s coming from the inside and insecurities we may have around money.”
A bear market means in index, in this case the S&P 500, drops 20% or more from the most recent high, which happened in January.
“Simply put, it means the stock market’s gone down,” Proctor said. “If you’re going to sell, what used to be $100, you’re going to get $80 today, maybe a little less.”
He said bear markets often resolve within a year and while it might be down, the balance at one point was going up.
“To remember patience is a virtue, especially when it comes to money,” Proctor said. “Be willing to ride it out or grin and bear it.”
At times like this, he said this is why it’s important to have a diversified portfolio to help be ready for the long-term.
“Hopefully, they’ve had good guidance on having enough income-producing investments that are in their portfolio so they can ride out the dips in the market like we’re experiencing today.”
Proctor said this also presents an opportunity for people who might have been thinking about investing to get in when stocks are on sale. But, he said, it’s also important to determine what those financial goals are to make the most of those investments.
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