This week, I’m talking about how to keep calm in a bear market.

Today, I’m talking about whether or not now is a good time to buy stocks. There is always opportunity, even in down markets, so today I want to talk about a couple of circumstances when you should be adding to stocks during this chaotic time: 

First of all, it’s a good time to buy if you are holding a lot of cash. If you have excess funds in your bank account, beyond what you need for emergencies and a cushion for the unexpected, and you’re currently earning $1.76 in interest a year, now is a great time to pick up some bargains in some great companies that just went on sale. That can be done through individual stocks or by adding to existing high-quality mutual funds or ETFs that you already own. 

Secondly, if you had a low percentage in stocks heading into this bear market, now is a great time to be adding to stocks. LEt’s say you’re 40% in stocks currently, but you should be 50% in stocks. Then I would be jumping in to the stock market to get that mix back it its ideal target. 

Don’t know what your ideal mix of stocks and bonds is? Starting with your age is a great way to figure out an appropriate mix. We have an age-based asset allocation cheat sheet that we use with our clients in determining the right mix of stocks and bonds for each of them, and you can get your copy by emailing me at [email protected]. That’s a-s-h-l-e-y-m @ truenorthra.com. 

 

So don’t be afraid to add to stocks during this time, especially if you have lots of cash or if you are low in stocks to begin with. It’s a strategy that takes courage, but one that tends to pay off, since you are doing what every investor tries to do, but seldom achieves - buying low. 

My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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