Beating the Bear
By Auxiliary i&i Financial Services Inc., February 1st, 2022
Lions, Tigers... and a Bear Market?
Bear markets are something that makes some investors nervous, and some investors excited.
According to Investopedia, a bear market “is when prices of securities fall sharply, and a sweeping negative view causes the sentiment to further entrench itself.”
We shouldn’t fear a bear market. Through smart decisions and careful management, investors can excel while others experience big losses or claw back their portfolios and lose on hard-earned gains.
Making the Best of a Bear Market
Newfound Research explains that a bear market is actually quite beneficial every now and then, explaining that “When the equity market declines, dividend yields will increase and valuations willdecline. Both changes will increase expected returns going forward.”
In other words, bear markets are a great opportunity to invest at a discount and set yourself up for increased returns in the future.
With the proper fund selection, investors can ride-out any short term losses and experience bigger gains once the bear market has passed.
Patience is a Virtue
Sometimes the best thing to do is ride it out. As predicted by Fisher Investments Canada, there is no reason to get out of your investments, and that “the early part of 2022 will likely require patience from investors, with most of the upside beginning around midyear”.
So, either sit tight and ride things out or be proactive and get ahead of the game- the choice is yours.
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