Planning Briefs

Bear markets in stocks tend to bring out investment deals and scams preying on fear. With the bear market becoming official on June 13, when the Standard &Poor’s 500 index closed more than -20% lower than its January 3 all-time high close of 4,796.56, please be aware that investment pitches and outright scams that prey on fear become more believable in bear markets.

In an exuberant bull market in stocks, speculative investments are more easily sold. People feel wealthier and are more willing to take a risk because risky assets are appreciating. The hot cryptocurrency prices and subsequent crash epitomize an overly exuberant investment period.  

The new bear market is likely to change things up. Financial consumers should expect a rise in the volume of pitches from fear mongers. Be on the lookout for pitches based on doomsday scenarios about a stock market crash, runaway inflation, and other frightful tales offering you shelter from the coming storm.

For 200 years, U.S. stocks and real estate have been among the leading investments available to Americans.  Gold, a popular asset in times of uncertainty, in the past, has not even come close to providing the returns on stocks. 

Investing is an emotional experience as well as financial. Times of high-anxiety can test your ability to tolerate risk and stick with your long term plan.

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