Is this a protracted Bear market or a pullback in a continuing Bull market? With historically low oil prices, concerns over China, the Middle East, the Feds raising rates and so on, is this a bad time to be in the market?  Who knows….

To illustrate the long-term performance of the US Equity Market, American Funds has a brochure with what they call the “Mountain Chart” going all the way back to 1934. The chart shows a reason not to invest in every single one of the 88 years (through 12/21). The fund illustrated ICA, which is similar to the S&P 500, has gone up 72 years and down 16 years and has an 88-year annualized return of 12.8%. If you would like a copy of the brochure, please let me know.

What can you do while you wait for the market to recover?

First; make no dramatic moves.  Selling low and getting back in (buying) when the market is higher has cost investors lots of money in the past.

Second; try to limit your spending to 4-5% of your income producing assets.  Only liquidate enough to live on.

Third; if available to you, consider a low interest (likely deductible) home equity loan to pay expenses while you wait for the market to recover and pay it back when it eventually does.

Fourth; limit your exposure to the media, especially the sensationalists who feed on your fears.  I only watch CNBC every morning while I read the Wall Street Journal.  Starting at 6am, the CNBC commentators provide factual, unbiased information and consistently have live interviews with the movers and shakers of the financial world – from all viewpoints – so you can get a balanced picture from the people who are dealing with the current economic reality.

Finally; call, email or come in to see me and we can review your situation to see if your portfolio is positioned properly.

I hope this helps and would love to hear from you about your thoughts, concerns or questions.

Best regards,

Marc R. Gillespie, CLU, ChFC, CFS, MSM, CLF