A bear market is here! What should you do?

Dear Megan,

The S&P 500 officially entered a bear market on June 13 2022. A bear market is defined as a market decline of over 20% or more over at least a two-month period. This is a somewhat arbitrary measure, but we can all agree the stock markets are down sharply this year so far. So, what should you do?

1. Don’t panic. Remember the mantra-buy low, sell high. Bear markets come around quite regularly, even though each one feels unique. For every bear market we had up to this point, a bull market has followed. For the 26 bear markets since 1928, there have been 27 bull markets. 1

2. Plan ahead. The average bear market is 289 days. Bull markets last on average 991 days. 2 If you have worked with Watercolor Financial Group for very long, then you know we work with our clients to anticipate your cash needs to minimize the amount of investments you need to sell during a market downturn. If your plans have changed and you would like to make a withdrawal, let us know. We can help you decide on an efficient way to make that happen.

3. Use dollar-cost averaging. Make regular investments at set times, regardless of how stocks are performing. Your 401k account is a great example of this. You make the decision one time to invest, and it happens each pay period without any work on your part. We also use this to move lump sums of money into investments. Many folks have money they’ve saved, inherited or retained from selling real estate. While stocks are on sale, it may be an excellent time to set up a dollar-cost-averaging plan to invest funds that you do not anticipate needing in the next few years. We are helping several of our clients do this in 2022.

While bear markets are part of the investment cycle, they still can be scary and disheartening. We want to help. Please call us with any questions or concerns and if you have a friend or family member who needs a second opinion, we are glad to help them also.

Sincerely,

Cass, Bleckley and Megan

1. The Complete History of Bear Markets, Kimberlee Leonard

2. The Complete History of Bear Markets, Kimberlee Leonard

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Cass's art for sale at Rotary Art Show at Water 2 Wine

Come to my art show!

Cass's paintings are for sale at Water 2 Wine, located at 3300 W. Anderson Lane, #304. The opening show is Saturday July 9th from 7 to 9 p.m.

Contact Cass if you'd like a ticket to the opening event. Tickets are $40. Or, go in and browse anytime in July and buy a glass of wine. All the watercolors from the 2022 calendar are for sale, and acrylic paintings too. All proceeds go the Rotary Club of West Austin, where Cass is a member.

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Bleckley Dobbs, Cass Grange and Megan Poore provide advisory services through NWAM, LLC dba Northwest Asset Management, an SEC registered investment adviser. Watercolor Financial Group is not a registered investment adviser. Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements. This material is intended to provide general financial education and is not written or intended as tax or legal advice.