Are You Protected Against The Next Bear Market?

Bear Market

It has been nine years since the Great Recession, and you’ve seen some outstanding gains in your portfolio, but every great run will end somewhere. In his article How To Face The Next Bear Market With Confidence Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors, shares that economists have raised the likelihood of a bear market occurring in the next 12 months to 16 percent, up from 5 percent in January.

Reality is that whether it happens sooner or later, a bear market will come, and the time to prepare for it is now. Holmes writes that there have been 5 major stock bear markets in the last 45 years and portfolios have lost averages of 40 percent during each. A loss of such size would be devastating to your portfolio and take an average of 7 years just to get back up to the break-even value. This is especially true for baby boomers whose portfolios have less time to bounce back and who are already taking retirement distributions or will be soon.

The key to protecting yourself from the ravages of a future bear market is to diversify your portfolio to include a healthy amount of bonds, real estate, utility stocks, and other investments. If you’re over- weighted in the stock market, you’re at risk for major losses.

At American Financial Planning we specialize in helping you get the maximum return FOR YOUR LEVEL OF RISK. To protect yourself against the inevitable bear market, contact us, schedule a free consultation, or submit your latest statement/s for a complimentary review.