Advice For How To Ride Out A Bear Market


WE’VE SEEN THE MASSIVE IMPACT THAT THE CORONAVIRUS HAS HAD ON WALL STREET AND THERE FINANCIAL MARKETS. THIS IS DIFFERENT FROM WHAT WE SAW IN 2008, SO WE WANTED TO LEARN MORE ABOUT THAT. WE TALKED ON SKYPE THIS MORNING WITH THE ENHANCEMENT GROUP ABOUT THE DIFFERENT TYPES OF BEAR MARKETS. HEY. THANKS SO MUCH FOR JOINING US TODAY. WHY DON’T WE START WITH WHAT IS THE DEFINITION OF A BEAR MARKET BECAUSE WE APPEAR TO BE IN ONE RIGHT NOW. YEAH. A BEAR MARKET IS AN UNFORTUNATE EVENT THAT HAS TO OCCUR I WOULD SAY EVERY 10 YEARS OR SO. THE MARKET ACTUALLY PULLS BACK, NOT 10%, LIKELY SIGZ SESSION, BUT ACTUALLY MORE THAN 20% PULL BACK IN FINANCIAL MARKET SINCE THEIR PEAK. THEY DOOP AND UNCOMFORTABLE. THE RECESSION COMPARED TO THIS IS MUCH MORE MILD. I UNDERSTAND THERE ARE THREE DIFFERENT TYPES OF BEAR MARKETS. CAN YOU TELL US ABOUT THAT? YEAH. WHEN YOU LOOK AT THE FINANCIAL MARKETS, IT’S THREE DIFFERENT TYPES OF BEAR MARKETS THAT OCCUR. THE FIRST IS A SICK SICLIICAL CYCLICAL. BUT THEN NORMAL INTEREST RATES RISE, AND WE HAVE THE EBB AND FLOW. AND THEN DURING THAT TIME PERIOD, THE DRAW DOWN IS AS LARGE AS 31%, AND THAT’S THE MOST COMMON. FROM THERE, WE LOOK AT THE SECOND TYPE. IT’S A STRUCTURAL BEAR MARKET, AND THAT’S WHAT WE SAW BACK IN 2008 WHERE IT WAS AN IMBALANCE AND FINANCIAL BUBBLE THAT ACTUALLY OCCURRED AND GREW APART. AND THAT’S WHERE THE 2008 CRISIS TURNED INTO. THOSE TEND TO BE A BIT LONG TO RECOVER FROM. ON AVERAGE THEY TAKE 15 MONTHS TO 3 AND A HALF YEARS, AND THE DRAW DOWN CAN BE SIGNIFICANT ON THOSE. BUT THIS IS DIFFERENT FROM BOTH OF THOSE, RIGHT. THAT’S RIGHT. THIS SOMEONE WHAT WAY CALL EVENT DRIVEN WHERE IT’S A ONE- OFF CHOP THAT CREATED A DISTURBANCE N ECONOMY. SO THE MOST RECENT ECOUNT WE CAN GIVE IS 9/11. WE HAD THIS ONE-TIME EVENT THAT PUT OUR COUNTRY IN CALAMITY. THAT IS IN SAYS ESTZANCE WHAT WE’VE SEEN WITH THE CORONAVIRUS. IT’S A ONE-TIME EVENT. THE GOOD NEWS IS THAT WHERE THESE MARKETS IS THAT THEY’RE TYPICALLY SHORT. IT IS TEMPORARILY 9 MONTHS, AND YOU CALL THIS THE BIG BEAR. A 29% PRODUCTION IN MARKET. I THINK A LOT OF PEOPLE ARE HOPING TO SEE A CERTAIN PULL BACK, AND THEN WE HAVE THIS DEPRECIATION. BUT ULTIMATELY THOUGH, IT’S GOING TO SEE, DEPENDING ON WHAT HAPPENS WITH THIS VIRUS. YEAH. IT’S GOING TO BE 100% UPON HOW THE WORLD RESPONDS TO THE VIRUS. WE’RE ENCOURAGING NOT JUST THE DATA BUT SOUTH KOREA AND NOW IN ITALY, IT’S ALL ABOUT THE RATE OF CHANGE. DECREASE IN THE CASES AND DEATH POLL. THAT’S WHERE WE SEE THE MARKET PERFORM POSITIVELY, AND ESPECIALLY IN TIME WHEN WE GIVE POSITIVE NEWS ABOUT THE DEVELOPMENTS. THOSE ARE GOING TO BE TREMENDOUS DAYS IMPORTANT NOT TO MISS WHEN THEY OCCUR. LET’S HOPE FOR THAT.

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