Bear Market: What to Do

Bear markets are NO fun and test the long-term investor. This crisis is even more distributing because the coronavirus has thrown our lives upside down and we don’t know the impact of how it will change our lives potential forever.

Things we recommend you do –

  1. Review your emergency reserve
  2. Review your short & long-term spending plan (Is the plan in line with your goals)
  3. Make sure you are maxing your 401K, all new contributions should be directed to stocks
  4. Rebalance your portfolio – I have no idea where the bottom is, but it is at least 36% closer than Feb 19th when the DOW was at 29,500
    1. Rebalancing worked really well in 2002 “DOT COM” & 2008 “Lehman”
    2. As Warren Buffett stated: ‘Be fearful when others are greedy, and be greedy when others are fearful.’
    3. The price of most equities has become much lower, giving equities more room to grow before they reach what we’d consider to be their fair value.
  5. Tax Loss harvest – can deduct up to $3,000 of losses on Federal & most state returns. NJ doesn’t allow losses & tax loss carry forwards so you have to be more strategic if you live in the Garden State.
  6. Get rid of Individual stock holding that were hard to sell before
  7. Remember the Stock market is made up of companies who all want to survive and thrive

Contact

Lighthouse Financial Advisors

3 Harding Rd Suite B
Red Bank, NJ 07701

P: 732.747.6697
F: 800.886.0302
info@lfadvisors.com

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Disclosures

Client Relationship Summary – Form CRS
Firm Brochure – Form ADV 2A

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