Nearly everywhere you turn, from friends and colleagues to news channels, you can find someone with a strong opinion about the financial markets.
At the moment, it seems that the news on so many fronts is bad with skyrocketing energy costs and both equity and bond markets down significantly since the start of the calendar year.
While investing in the stock market is typically a prudent choice for investors seeking long-term growth, sharp drops can still be hard to stomach.
Below are some things to keep in mind if a market tumble makes you feel the need to โdo somethingโ which might shut you out of the strong recoveries that have historically followed market downturns.
๐๐จ๐ฐ๐ง๐ญ๐ฎ๐ซ๐ง๐ฌ ๐๐ซ๐๐งโ๐ญ ๐ซ๐๐ซ๐ ๐๐ฏ๐๐ง๐ญ๐ฌ
Typical investors, in all markets, will endure many of them during their lifetime. There has been a lot of focus on the transition to a bear market (with the line in the sand of a 20% decline having been triggered by the US S&P 500 index in mid-June 2022).
This is the same market that delivered returns of 36% for the year ended December 2021, and even with a 20% decline at the onset of the Covid pandemic, recorded 7.3% for the year ended December 2020.
It is important to keep in context that in spite of several bear markets, the market has also continued to trend higher over the long term. Not all financial market declines are the same in length or severity.
For example, historically speaking, the GFC of 2008-2009 was an extreme anomaly. As challenging as that event was, it was followed by one of the longest stock market recoveries in history.
The Australian equity market (which admittedly recorded a more modest, but still very respectable 17.5% for the year ended December 2021), has held up relatively well, posting a decline of 11% (so not yet in the bear territory).ย ย ย
๐๐ซ๐๐ฆ๐๐ญ๐ข๐ ๐ฆ๐๐ซ๐ค๐๐ญ ๐ฅ๐จ๐ฌ๐ฌ๐๐ฌ ๐๐๐ง ๐ฌ๐ญ๐ข๐ง๐ , ๐๐ฎ๐ญ ๐ข๐ญโ๐ฌ ๐ข๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ ๐ญ๐จ ๐ค๐๐๐ฉ ๐ ๐ฅ๐จ๐ง๐ -๐ญ๐๐ซ๐ฆ ๐ฉ๐๐ซ๐ฌ๐ฉ๐๐๐ญ๐ข๐ฏ๐ ๐๐ง๐ ๐ฌ๐ญ๐๐ฒ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐๐ ๐ข๐ง ๐จ๐ซ๐๐๐ซ ๐ญ๐จ ๐ฉ๐๐ซ๐ญ๐ข๐๐ข๐ฉ๐๐ญ๐ ๐ข๐ง ๐ญ๐ก๐ ๐ซ๐๐๐จ๐ฏ๐๐ซ๐ข๐๐ฌ ๐ญ๐ก๐๐ญ ๐ญ๐ฒ๐ฉ๐ข๐๐๐ฅ๐ฅ๐ฒ ๐๐จ๐ฅ๐ฅ๐จ๐ฐยญ.
Some bear markets since 1980 have been sharp, but many bull market surges have been even more dramatic, and often longer, leaving stock investors well compensated over the long term for the risk they took on.
But such action would shut you out of the strong recoveries that have historically followed market downturns. The answer is to come up with a game plan before the next market pullback so youโre well positioned to try to take advantage of the opportunities that follow.
Whatโs more, youโll probably know what to expect as markets cycle through their phases, so you can tune out messages that donโt help your strategy.
๐ ๐ข๐ง๐๐ฅ ๐ฌ๐๐ฒ
Please donโt hesitate to contact me should you have any questions, require assistance, or wish to discuss any of the above in more detail. Book in a call
๐๐ฐ๐ต๐ฆ๐ด: 1 ๐๐ฉ๐ฆ ๐ญ๐ข๐ต๐ฆ๐ด๐ต ๐ฃ๐ถ๐ญ๐ญ ๐ณ๐ถ๐ฏ ๐ช๐ด ๐ด๐ต๐ช๐ญ๐ญ ๐ฐ๐ฏ๐จ๐ฐ๐ช๐ฏ๐จ. ๐๐ฉ๐ฆ๐ค ๐ข๐ญ๐ค๐ถ๐ญ๐ข๐ต๐ช๐ฐ๐ฏ๐ด ๐ณ๐ฆ๐ฑ๐ณ๐ฆ๐ด๐ฆ๐ฏ๐ต ๐ต๐ฉ๐ฆ ๐ฑ๐ณ๐ช๐ค๐ฆ ๐ช๐ฏ๐ค๐ณ๐ฆ๐ข๐ด๐ฆ ๐ข๐ฏ๐ฅ ๐ฑ๐ฆ๐ณ๐ช๐ฐ๐ฅ ๐ถ๐ฑ๐ต๐ฐ 30 ๐๐ถ๐ฏ๐ฆ 2021. ๐๐ข๐ญ๐ค๐ถ๐ญ๐ข๐ต๐ช๐ฐ๐ฏ๐ด ๐ข๐ณ๐ฆ ๐ฃ๐ข๐ด๐ฆ๐ฅ ๐ฐ๐ฏ ๐ต๐ฉ๐ฆ ๐&๐ ๐๐ญ๐ญ ๐๐ณ๐ฅ๐ช๐ฏ๐ข๐ณ๐ช๐ฆ๐ด ๐๐ฏ๐ฅ๐ฆ๐น ๐ง๐ฐ๐ณ ๐ต๐ฉ๐ฆ ๐ฑ๐ฆ๐ณ๐ช๐ฐ๐ฅ 1/1/1980 ๐ต๐ฐ 30/6/2021. ๐ ๐ฃ๐ฆ๐ข๐ณ ๐ฎ๐ข๐ณ๐ฌ๐ฆ๐ต ๐ช๐ด ๐ฅ๐ฆ๐ง๐ช๐ฏ๐ฆ๐ฅ ๐ข๐ด ๐ข ๐ฑ๐ณ๐ช๐ค๐ฆ ๐ฅ๐ฆ๐ค๐ณ๐ฆ๐ข๐ด๐ฆ ๐ฐ๐ง ๐ฎ๐ฐ๐ณ๐ฆ ๐ต๐ฉ๐ข๐ฏ 20%. ๐ ๐ฃ๐ถ๐ญ๐ญ ๐ฎ๐ข๐ณ๐ฌ๐ฆ๐ต ๐ช๐ด ๐ฅ๐ฆ๐ง๐ช๐ฏ๐ฆ๐ฅ ๐ข๐ด ๐ข ๐ฑ๐ณ๐ช๐ค๐ฆ ๐ช๐ฏ๐ค๐ณ๐ฆ๐ข๐ด๐ฆ ๐ฐ๐ง ๐ฎ๐ฐ๐ณ๐ฆ ๐ต๐ฉ๐ข๐ฏ 20%. ๐๐ฉ๐ฆ ๐ฑ๐ญ๐ฐ๐ต๐ต๐ฆ๐ฅ ๐ข๐ณ๐ฆ๐ข๐ด ๐ฅ๐ฆ๐ฑ๐ช๐ค๐ต ๐ต๐ฉ๐ฆ ๐ญ๐ฐ๐ด๐ด๐ฆ๐ด/ ๐จ๐ข๐ช๐ฏ๐ด ๐ณ๐ข๐ฏ๐จ๐ช๐ฏ๐จ ๐ง๐ณ๐ฐ๐ฎ ๐ต๐ฉ๐ฆ ๐ฎ๐ช๐ฏ๐ช๐ฎ๐ถ๐ฎ ๐ง๐ฐ๐ญ๐ญ๐ฐ๐ธ๐ช๐ฏ๐จ ๐ข 20% ๐ญ๐ฐ๐ด๐ด ๐ต๐ฐ ๐ต๐ฉ๐ฆ ๐ณ๐ฆ๐ด๐ฑ๐ฆ๐ค๐ต๐ช๐ท๐ฆ ๐ฎ๐ข๐น๐ช๐ฎ๐ถ๐ฎ ๐ง๐ฐ๐ญ๐ญ๐ฐ๐ธ๐ช๐ฏ๐จ ๐ข 20% ๐ข๐ฑ๐ฑ๐ณ๐ฆ๐ค๐ช๐ข๐ต๐ช๐ฐ๐ฏ ๐ช๐ฏ ๐ต๐ฉ๐ฆ ๐ถ๐ฏ๐ฅ๐ฆ๐ณ๐ญ๐บ๐ช๐ฏ๐จ ๐ช๐ฏ๐ฅ๐ฆ๐น. ๐๐ข๐ญ๐ค๐ถ๐ญ๐ข๐ต๐ช๐ฐ๐ฏ๐ด ๐ฃ๐ข๐ด๐ฆ๐ฅ ๐ฐ๐ฏ ๐ฎ๐ฐ๐ฏ๐ต๐ฉ๐ญ๐บ ๐ฅ๐ข๐ต๐ข. ๐๐ฐ๐จ๐ข๐ณ๐ช๐ต๐ฉ๐ฎ๐ช๐ค ๐ด๐ค๐ข๐ญ๐ฆ๐ด ๐ข๐ณ๐ฆ ๐ถ๐ด๐ฆ๐ฅ ๐ง๐ฐ๐ณ ๐ต๐ฉ๐ช๐ด ๐ช๐ญ๐ญ๐ถ๐ด๐ต๐ณ๐ข๐ต๐ช๐ฐ๐ฏ. ๐๐ญ๐ญ ๐ฅ๐ช๐ด๐ต๐ณ๐ช๐ฃ๐ถ๐ต๐ช๐ฐ๐ฏ๐ด ๐ข๐ณ๐ฆ ๐ณ๐ฆ๐ช๐ฏ๐ท๐ฆ๐ด๐ต๐ฆ๐ฅ.
๐๐ฐ๐ถ๐ณ๐ค๐ฆ: ๐๐ฐ๐ณ๐ฏ๐ช๐ฏ๐จ๐ด๐ต๐ข๐ณ ๐๐ข๐ต๐ข ๐ข๐ฏ๐ฅ ๐๐ข๐ฏ๐จ๐ถ๐ข๐ณ๐ฅ. ๐๐ข๐ฏ๐จ๐ถ๐ข๐ณ๐ฅ ๐๐ฏ๐ท๐ฆ๐ด๐ต๐ฎ๐ฆ๐ฏ๐ต๐ด ๐๐ถ๐ด๐ต๐ณ๐ข๐ญ๐ช๐ข ๐๐ต๐ฅ (๐๐๐ 72 072 881 086 / ๐๐๐ ๐๐ช๐ค๐ฆ๐ฏ๐ด๐ฆ 227263) ๐ช๐ด ๐ต๐ฉ๐ฆ ๐ฑ๐ณ๐ฐ๐ฅ๐ถ๐ค๐ต ๐ช๐ด๐ด๐ถ๐ฆ๐ณ ๐ข๐ฏ๐ฅ ๐ต๐ฉ๐ฆ ๐๐ฑ๐ฆ๐ณ๐ข๐ต๐ฐ๐ณ ๐ฐ๐ง ๐๐ข๐ฏ๐จ๐ถ๐ข๐ณ๐ฅ ๐๐ฆ๐ณ๐ด๐ฐ๐ฏ๐ข๐ญ ๐๐ฏ๐ท๐ฆ๐ด๐ต๐ฐ๐ณ. ๐๐ฆ ๐ฉ๐ข๐ท๐ฆ ๐ฏ๐ฐ๐ต ๐ต๐ข๐ฌ๐ฆ๐ฏ ๐บ๐ฐ๐ถ๐ณ ๐ค๐ช๐ณ๐ค๐ถ๐ฎ๐ด๐ต๐ข๐ฏ๐ค๐ฆ๐ด ๐ช๐ฏ๐ต๐ฐ ๐ข๐ค๐ค๐ฐ๐ถ๐ฏ๐ต ๐ธ๐ฉ๐ฆ๐ฏ ๐ฑ๐ณ๐ฆ๐ฑ๐ข๐ณ๐ช๐ฏ๐จ ๐ต๐ฉ๐ฆ ๐ข๐ฃ๐ฐ๐ท๐ฆ ๐ช๐ฏ๐ง๐ฐ๐ณ๐ฎ๐ข๐ต๐ช๐ฐ๐ฏ ๐ด๐ฐ ๐ช๐ต ๐ฎ๐ข๐บ ๐ฏ๐ฐ๐ต ๐ฃ๐ฆ ๐ข๐ฑ๐ฑ๐ญ๐ช๐ค๐ข๐ฃ๐ญ๐ฆ ๐ต๐ฐ ๐บ๐ฐ๐ถ๐ณ ๐ค๐ช๐ณ๐ค๐ถ๐ฎ๐ด๐ต๐ข๐ฏ๐ค๐ฆ๐ด. ๐ ๐ฐ๐ถ ๐ด๐ฉ๐ฐ๐ถ๐ญ๐ฅ ๐ค๐ฐ๐ฏ๐ด๐ช๐ฅ๐ฆ๐ณ ๐บ๐ฐ๐ถ๐ณ ๐ค๐ช๐ณ๐ค๐ถ๐ฎ๐ด๐ต๐ข๐ฏ๐ค๐ฆ๐ด ๐ข๐ฏ๐ฅ ๐ฐ๐ถ๐ณ ๐๐๐๐ ๐๐ถ๐ช๐ฅ๐ฆ, ๐๐ณ๐ฐ๐ฅ๐ถ๐ค๐ต ๐๐ช๐ด๐ค๐ญ๐ฐ๐ด๐ถ๐ณ๐ฆ ๐๐ต๐ข๐ต๐ฆ๐ฎ๐ฆ๐ฏ๐ต (๐๐๐) ๐ฐ๐ณ ๐๐ณ๐ฐ๐ด๐ฑ๐ฆ๐ค๐ต๐ถ๐ด ๐ฃ๐ฆ๐ง๐ฐ๐ณ๐ฆ ๐ฎ๐ข๐ฌ๐ช๐ฏ๐จ ๐ข๐ฏ๐บ ๐ช๐ฏ๐ท๐ฆ๐ด๐ต๐ฎ๐ฆ๐ฏ๐ต ๐ฅ๐ฆ๐ค๐ช๐ด๐ช๐ฐ๐ฏ. ๐ ๐ฐ๐ถ ๐ค๐ข๐ฏ ๐ข๐ค๐ค๐ฆ๐ด๐ด ๐ฐ๐ถ๐ณ ๐๐๐๐ ๐๐ถ๐ช๐ฅ๐ฆ, ๐๐๐ ๐ฐ๐ณ ๐๐ณ๐ฐ๐ด๐ฑ๐ฆ๐ค๐ต๐ถ๐ด ๐ฐ๐ฏ๐ญ๐ช๐ฏ๐ฆ ๐ข๐ต ๐ธ๐ธ๐ธ.๐ท๐ข๐ฏ๐จ๐ถ๐ข๐ณ๐ฅ.๐ค๐ฐ๐ฎ.๐ข๐ถ ๐ฐ๐ณ ๐ฃ๐บ ๐ค๐ข๐ญ๐ญ๐ช๐ฏ๐จ ๐ถ๐ด ๐ฐ๐ฏ 1300 655 101. ๐๐ข๐ด๐ต ๐ฑ๐ฆ๐ณ๐ง๐ฐ๐ณ๐ฎ๐ข๐ฏ๐ค๐ฆ ๐ช๐ด ๐ฏ๐ฐ๐ต ๐ข๐ฏ ๐ช๐ฏ๐ฅ๐ช๐ค๐ข๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ง ๐ง๐ถ๐ต๐ถ๐ณ๐ฆ ๐ฑ๐ฆ๐ณ๐ง๐ฐ๐ณ๐ฎ๐ข๐ฏ๐ค๐ฆ. ๐๐ฉ๐ช๐ด ๐ฑ๐ถ๐ฃ๐ญ๐ช๐ค๐ข๐ต๐ช๐ฐ๐ฏ ๐ธ๐ข๐ด ๐ฑ๐ณ๐ฆ๐ฑ๐ข๐ณ๐ฆ๐ฅ ๐ช๐ฏ ๐จ๐ฐ๐ฐ๐ฅ ๐ง๐ข๐ช๐ต๐ฉ ๐ข๐ฏ๐ฅ ๐ธ๐ฆ ๐ข๐ค๐ค๐ฆ๐ฑ๐ต ๐ฏ๐ฐ ๐ญ๐ช๐ข๐ฃ๐ช๐ญ๐ช๐ต๐บ ๐ง๐ฐ๐ณ ๐ข๐ฏ๐บ ๐ฆ๐ณ๐ณ๐ฐ๐ณ๐ด ๐ข๐ฏ๐ฅ ๐ฐ๐ฎ๐ช๐ด๐ด๐ช๐ฐ๐ฏ๐ด. ยฉ 2021 ๐๐ข๐ฏ๐จ๐ถ๐ข๐ณ๐ฅ ๐๐ฏ๐ท๐ฆ๐ด๐ต๐ฎ๐ฆ๐ฏ๐ต๐ด ๐๐ถ๐ด๐ต๐ณ๐ข๐ญ๐ช๐ข ๐๐ต๐ฅ. ๐๐ญ๐ญ ๐ณ๐ช๐จ๐ฉ๐ต๐ด ๐ณ๐ฆ๐ด๐ฆ๐ณ๐ท๐ฆ๐ฅ. ๐๐๐๐๐๐๐๐๐๐_072021