FA Center: Bear market blues: How to keep a sense of financial control in uncertain times.

by | Aug 5, 2022 | Stock Market

Between pandemic lockdowns, health scares, contentious politics and significant inflation with rising prices, many U.S. investors might feel they’re losing control of their situations. Add to that a bear market for stocks, with a possible recession looming.  To remain resilient, we can focus on caring for our physical, mental and financial wellness — and that of our families. We can act now to prepare for tough times over the short-term and protect long-term financial options. We can find a manageable balance between enjoying our money now and saving for what we need later. 

There is some good news. Despite the U.S. stock-market’s fall, bear markets are temporary. While each bear market is unique, they tend to last 11- to 12 months on average and then bounce back. Since 1957, the S&P 500
has gained an average of 2.9% after one month, 5.5% after six months, and 23.9% after one year following the start of a bear market. Bear markets provide opportunities for bargain buys and tax management. Read: Whatever you’re feeling now about stocks is normal bear-market grief — and the worst is yet to come If a recession hits the U.S., it will also be temporary. Since 1945, the National Bureau of Economic Research has documented 13 recessions, and they lasted 10.3 months on average. The last significant recession from 2007 to 2009 lasted 18 months.  While economists are in a “wait and see” mode regarding a recession, now is the time to act and brace for potential impacts. Here are five ways to manage: 1. Know where you stand financially, beginning with cash flow: Are you earning enough money monthly to cover your expenses? Income minus expenses equals cash flow. When your income exceeds your expenses, you have pos …

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