Has the BandAid Been Ripped Off the Markets?
The Bull is Dead, Now What? On Wednesday, the longest ever bull market came to a fast and furious end. It had quietly run for more than 11 years. But, markets and economies have always run in cycles, and all cycles have ends, and at some point new beginnings. As we acknowledge the current Bear Market there are steps to consider.
For Those Taking Distributions Assess the level of need associated with current portfolio distributions. Taking unnecessary distributions during down markets leaves fewer assets to grow during a market rebound. Boring bonds have been a vital part of your portfolio. They served as insurance against just this type of market fall. Consider using a portion of those bonds if current distributions are needed.
For Those Saving for the Future Continue saving and investing in equities. Remember when you buy stocks, you are buying FUTURE earnings of companies at current prices. Today’s uncertainty has lowered stock prices and will effect near-term corporate earnings. I love to remind folks of companies like 3M, Coca Cola, or Johnson & Johnson which have shared profits by paying and increasing dividends every year for nearly 60 years. This is not a recommendation to buy, but examples of well managed companies that have endured a lot of economic stress and downturns.
There is No Single Silver Bullet Don’t fall prey to sellers of magic solutions, now or ever. Engage an unbiased financial planner who will sell you advice not products. Plan well & thanks for reading.