There is a reason I am not a ‘go walk in the wood’s’ kind of guy. I am scared of bears. (I am also scared of teenagers, zombies, and aliens, that
find people in the woods and eat them) I have a strict don’t eat me policy. If you do encounter a bear the ‘experts’ say don’t run! ‘Right,’ you say. I am pretty sure my brain is going to scream, Run! But if you run the bear is going to chase you down and eat you!
We have officially entered a bear market. What should you do? First, don’t run! If you do run, if the bear doesn’t get you the zombies and aliens will. (Teenagers are too busy playing video games instead of getting jobs.) Make sound rational decisions and avoid panic. Prepare for the bear. Don’t hide in the barn or check the circuit breaker box. (No one ever comes back)
⦁ Are you invested for where the market is going?
⦁ Can you weather an extended down market?
⦁ How much income is being generated from your investments?
At this point we are set back to where we were at the start of 2021.
You need to be careful of the “wait until it comes back, then I’ll change attitude.”
As an example, take Bank of America corp5. In August 1, 2009 the share price of BAC was $14.58. Bank of America could be considered a strong company at a discount from 2 years previous (It was $48.28 August 1st 2007). On May 1, 2016 it was $14.49. Excluding dividends7 there was no share price appreciation for 7 years! The point I am making is that companies and markets change. Under performance could last year’s especially after a strong run like Bank of America had. Stagnate portfolios can be a problem.
We are seeing a change in our economy. High inflation, rising interest rates, supply chain interruptions (this is new, not having the stuff to sell like cars, baby formula, etc.) and geo-political conflicts (unfortunately, not new).
Now is the time to reevaluate what you are invested in. Staying over concentrated in past winning companies, industries or investment styles when the economy has made a clear turn could lead to the problems like I illustrated above. That is why you see this disclaimer from guys like us.
“Past Performance is not a guarantee to future results.”
My second point, “Can you weather an extended downturn?” is an examination of your retirement plans and need for income. Selling shares when the market is down erodes your savings and lowers your standard of living.
Finally, are you generating adequate income from your portfolio’s? This can be done through with market based and non-stock market-based investments. Now is the time to evaluate your portfolio and see if adjustments are needed. Selling in panic to cash is a sure-fire way to lock in losses. Like a real bear, walk away slowly. If you sell, have a plan to reinvest.
I know I already said finally, but according to Marketwatch9 “Those who buy stocks the day the S&P 500 enters a bear market have made an average of 22.7% in 12 months.” Now is the time to Prepare and not run from the Bear.
You’re Invited to Our Summer BBQ!
Toro Bravo Investments Advisors is announcing our first (in what we hope to be a new tradition) Annual Summer BBQ. Please watch your mailbox for your personal invitation. We are asking everyone to RSVP so we can have an estimate of how many to expect. The date will be:
Tuesday August 2nd 2022 from 4 – 8pm
In addition to the BBQ, we will have a food truck at our office as well. There will be live music, games and door prizes. (Limit 1 door or game prize per person). We encourage you to bring your children or grandchildren. A professional photographer will be on hand to get you that perfect family photo compliments of Toro Bravo.
There will be other exhibits so be sure not to miss this event! We have something special planned for our clients who attend.
Wedding Announcement
On March 1st Brian Moon married Nery Mortiz on the beach at the Margaritaville Resort in Guanacaste, Costa Rica. The event was zoomed and had over 100 remote guests from the USA and Philippines. Below are some of the pictures of the ceremony and the following reception held in the Philippines on April 10th. Nery currently lives in the Philippines. They met on a dating app last year and dated for 10 months before getting married. Many have asked when Nery and their daughter Xeanne will come to the USA? They have filed a marriage visa and it will take a year to process.
Brian and Nery want to thank all who attended the zoom ceremony and have sent well wishes. .
Sources Citations Bibliography:
1. This joke is a reference to horror movies that focus on zombies, aliens, and teenagers. I left out vampires.
2. Bear Market –“Bear markets occur when prices in a market decline by more than 20%, often accompanied by negative investor sentiment and declining economic prospects.” -Investopedia
3. Again horror movie reference.
4. Using the S&P 500.
5. Not a recommendation to buy, sell, or hold any investment. For illustration purposes only.
6. Yahoo Finance
7. Dividends were .01 to .05 cents per share, per quarter during that time period.
8. By November 1st 2017 Bank of America was at $32. See footnote #5.
9. Marketwatch.com Those who buy stocks the day the S&P 500 enters a bear market have made an average of 22.7% in 12 months. -Mark Hurbert
Supplemental Disclaimers:
This article is informational only and is not investment advice. This is not an offer to buy, hold, or sell investments like securities or insurance products.
Securities and Investment Advisory Services are offered though Toro Bravo Investment Advisors, LLC. Life Insurance and Annuities sold as an insurance broker are not a fiduciary relationship and are not offered by Toro Bravo Investment Advisors, LLC.
Securities or Insurance are not FDIC/SIPC insured and investments contain risk plus could be subject to loss.
Losses could be short term or permanent. Numbers and figures illustrated are hypothetical in nature and past performance is not a guarantee or indication of future results/performance.
We are not affiliated with the Social Security Administration (SSA), Internal Revenue Service (IRS), or any Governmental Agency.
Do not rely solely on the Legal, Tax, or Financial information presented for it may not be suitable for your individual situation.
Consult your legal, tax, and/or financial professional before acting on any strategy or recommendation (i.e. major changes or before initiating the purchase, hold, or sale of any investment or investment strategy). Every individual’s strategy can differ depending on current circumstances and goals.
