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How to manage your emotions in a bear market

The stock market turns the old adage upside down: what goes down, must come up. One only needs to look at a graph of the S&P 500, Nasdaq, or the Dow Jones to see that a dizzying rise follows every tumultuous tumble. Of course, when you open your phone in the morning and see stocks plunging, headlines promising doom and gloom, and political rivals wagging accusatory fingers, it’s easy to think the time is nigh to sell everything before you lose everything. So how can one manage their emotions in a bear market so they don’t make costly mistakes? Let’s look at some ways to reign them in!

Turn off the TV, Ignore the News

As previously alluded to, the news tends to focus on the negative, and news regarding the stock market downturns is no exception. Headlines are designed to attract clicks and glue you to the screen. It’s natural to be concerned about your nest egg, but doomscrolling won’t do you any good – it will only lead to unbearable anxiety.
Take a deep breath, relax, and don’t succumb to scare tactic fallacies. Turn off your news notifications on your phones. Stay off Facebook. Fear is your greatest enemy in a volatile market, so it’s exceedingly important to keep a cool head, take a step back and look at things through a historical and logical lens. Go for a run, hit the greens, do some breathing exercises – anything to help you calm your nerves so you can look at things without roiling emotions or unrealistic expectations.

Remember the Past to See the future

One doesn’t need a crystal ball to see the future. The stock market is quite unpredictable in the short term, but in the long term, it’s absolutely predictable. Even in the worst of times, the market has always returned to pre-crisis levels and beyond. This time or any future times will not be any different. Those who stay the course are those who stand to gain the most, so instead of selling, discuss dollar-cost-averaging strategies with your advisor or buy the dip to take full advantage of a bear market. Unfortunately, investors who panic in a bear market will only lock in losses, and remember – there’s always someone on the other side of the trade who pockets the money. Be on the right side of that trade!

Depend on us, your financial advisors

The financial advisors at Walters are here not to just advise upon and manage your investments, but also to give you confidence and reassurance during turbulent times. We have weathered many a bear market and have the tools and strategies necessary to not just survive market downturns, but make the most of them. We can use such opportunities to fine-tune your portfolio through rebalancing in order to reduce vulnerabilities while staying in line with your risk tolerance.

Final Thoughts

As history shows, the markets always correct themselves. In fact, missing market runs leads to enormous unrealized gains. Stay tuned to find out why!

About the Author

  • Douglas Walters

    Doug is the Managing Partner of Walters Strategic Partners, LLC, a licensed Registered Investment Advisory firm. Doug is a licensed Certified Public Accountant (CPA) in the state of Florida and holds a Series 65 Investment Advisor Representative securities license. He is also a member of the AICPA. With over 28 years of experience as a CPA, he believes investment decisions should be based on decades of peer-reviewed research rather than relying on the latest “hot tip” from media outlets. This empirical evidence puts the science of investing to work for his clients.

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