This article may contain references to some of our advertising partners. Should you click on these links, we may be compensated. For more about our advertising policies, read our full disclosure statement here.
I don’t know if you’ve heard, but the stock market is up. I mean way up. Up to the clouds up. When I looked at the status of my 401(k) last week, I swear I almost pooped…with joy! I believe my exact words were, “Shazam!”
If you are like me, you are probably feeling like a regular Warren Buffet right about now. I mean, how can you help yourself right? You’ve waded through the tough times, and now all of your patience is paying off in spades! Still, we most of us know what is lurking around the corner – and if we don’t we ought to. Whenever we have a buck wild, idiot chasing, uber bullish market, we know that there is a mean old bear lurking right around the corner. Here are a few tips to help you keep your wits and about you and avoid that nasty bear attack.
Bear Market Survival Tips
1) Hold Your Ground
So, you’ve got a bear market charging right at you? Have you lost your nerve – or your stool – yet? (Yep, 3 paragraphs – 2 poop jokes! Boom!) One of the best things you can do to combat a bear market is to hold your ground. Rather than getting scared and leaving the marketplace, project strength. A great way to do this is to invest for the long-term. This mindset helps to eliminate the fear caused by market fluctuations. So, hold your ground and we’ll clean up the brown underwear later. (Make that 3.)
2) Project Strength
Now that you’ve decided to hold your ground, it is also important to project strength. A bear market will eat you alive if you show weakness by turning around and running. Remember, bears are just as scared of you as you are of them. So, stand up to the bear. Waive those arms above your head. Don’t be afraid. When everybody is selling, project your strength and start buying. While it may be frightening, this is the way that real stock market winners make their money. You’ll find great deals that can make you a ton of money when the bulls return. Ride the market out and slap that fear across its lily-white face.
3) Move Slowly and Don’t Panic
When it comes to investing, fear is a killer. If you are invested in the markets, you are bound to see a bear market eventually. When you see a bear market approaching, the most important thing is that you do not panic. This is so important that I am going to repeat it: DO NOT PANIC. Take a deep breath, make well-informed decisions, and remember that when the bulls will eventually be back to rescue you. If absolutely necessary, as a last resort, you may slowly retreat into the high ground of a
tree financial safe haven.
4) Plan for the Encounter
Along with long-term investing, planning for the eventual bear market encounter can help you avoid a total panic meltdown. Calmly and rationally planning a set asset allocation can be the key to surviving a bear attack. Before you find yourself in the middle of a bear attack, sit down and diversify your investments according to your tolerance for risk and your planned investment timeline. When trouble comes, sticking to this plan can help minimize your losses – as well as keep you from over indulging when the bulls show up for dinner. Remember, bulls and bears both make money. Pigs get slaughtered.
There you have it. Four tips to keep you alive and kicking. It is a wild world out there, and knowing how to react can save your financial life.
Do you have any tips for surviving a bear market encounter? Let ’em fly in the comments below!