Navigating A Bear Market As A Soon-To-Be Retiree

You’ve done it. You’ve invested, saved, and properly allocated your money to live a fulfilling retirement…but now the economy has entered a bear market and you don’t have as much money as you thought you did.

This is a reality for a lot of people right now. How can you avoid this from happening to you?

At Heller Wealth Management, we don’t just help people navigate bear markets, but we help people plan for the possibility of them far in advance so that when one does happen, they are more than prepared.

Some of the things we help people with prior to and during a bear market include asset allocation, tax loss harvesting, roth conversions, and so much more.

Read on for some more advice about navigating a downturned market and how you can integrate the possibility of a recession into every financial planning process.

How To Review And Rebalance Your Asset Allocation During a Bear Market

When the market changes, so should some of your financial decisions and documentation. One of the many points discussed in episode 111 of Life Unlimited is that whenever there is a bear market, you should review your retirement portfolio to see if your investments are still your best bet for achieving the retirement you want.
Some people get so stressed out during a bear market that they just want to stop the bleeding and limit any further losses, so they pull out of the market. In the long run, taking your investments out and having your assets in cash was really not a good idea.
Remember: preparing yourself for a bear market long before they happen will allow you to avoid being forced to take out your investments in cash and suffer heavy losses.
Another way to cut your losses in a bear market is to save as much cash as you can that can support you for a long period of time. This way when you need cash to support yourself, as mentioned earlier, you will not be forced to take it out of your portfolio. Ideally, Heller Wealth Management says 3 years of living expenses, but this takes time to accumulate.

Some other forms of asset allocation that are discussed in episode 111 of Life Unlimited include bond duration review, cash review, and more.

Staying Cool and Collected

There are a ton of ways people react to a bear market. Some are cool and collected and others freak out and want to cut their losses as soon as possible.

So how can you stay cool during a bear market and not rely on your investments to support you through it?
Episode 111 of Life Unlimited goes into depth about how you can avoid feeling panicked when your portfolio continues to go down, down, and down.

When you don’t need the money in your portfolio for a long time, then you have nothing to worry about. It’s when you are relying on that money and have no backup plan that it gets a little complicated.
Here are some ways Heller Wealth Management says you can become more cool and collected in a bear market:

  • Have a backup plan (don’t let your investments be your emergency fund, have some living expenses in cash)
  • Try not to become obsessed with the state of the stock market, you’re only going to get up in your head about it
  • Remind yourself: “the history of the market has proven that the prices will eventually go back up, I just need to wait”

Tune in to episode 111 of Life Unlimited to hear more advice from Larry: HERE

Mistakes To Avoid In A Bear Market

In the latest episode of Life Unlimited, Larry reflects on some of the most commonly asked questions he gets during times of a downturned market. 

He then goes on to explain the solutions to these questions in detail, but right now, we need to talk about one of the bigger mistakes he has seen someone make in a bear market.

Some people have chosen not to invest their cash until a bear market appears. This means that they are holding onto cash for years and years with no return and only decide to invest when stock prices are extremely low–way lower than normal.

This is something Heller Wealth Management does NOT advise you to do. You could be waiting years if not decades for a bear market to appear which means you have wasted a large chunk of time and have let your cash depreciate in value as inflation rises.

This may seem smart at the moment, but don’t fall victim to these “get rich quick” schemes.

Listen to the episode for more on this conversation: HERE

Creating An Emergency Fund

This piece of advice is not something that has been mentioned for the first time in Life Unlimited. Larry says it in a lot of his episodes, and that is to save up to 3 years of your living expenses.

There is no doubt that this is a large sum of cash, but with proper planning and diligent saving, it is possible.

Larry mentions that a bear market can last up to 3-4 years if you can believe it! So if you are retired and need money for living expenses, how are you going to support yourself when all of your money is in the bear market?

You don’t want to be forced to take out your investments before they have the opportunity to rise in value again.

Learn more about the strategies Larry uses with people to accumulate 3 years worth of living expenses by tuning in to Life Unlimited!

To learn more about navigating a bear market, listen to episode 111 of the Life Unlimited Podcast or talk to our team directly via our contact page.