One of the most utilized words in stock market vernacular is volatility. While it can loosely translate as fluctuation on returns, it’s alter ego might describe it simply as a bumpy ride in finance. Since the recent drops in the market the first two quarters of the year, we as a financial whole have been gripping tight to our cash, insight, and a healthy bit of faith. Based on the past, it’s easily deductible a bear market can grapple only for so long before transitioning back into a bull market. When the HCM-BuyLine® first indicated a major sell signal last quarter, we jumped into action to strive to protect our 401(k) Optimizer® subscribers from experiencing the burn of major loss.
Knowing when to buy and what to buy in a Bear Market
Word travels fast through media and news sources ready at our fingertips. With so many easy pathways to purchase, individual investors are forging their own path in the stock market. When looking at today’s bear market, it’s tantamount for investors, advisors, and managers to press the pause button, while individuals devoid of mediators are keeping a watchful eye over cheap stocks with potential. Due to this investment gray zone, investors have amassed trillions of dollars in cash and it’s only a matter of time before it is reinvested. The market will always tend to function based on investor sentiment and their choices, which makes facing a bear market anxiety inducing. Investors were riding the high of the bull market until February, when the recession truly “hit.” Now, it will be a short waiting game to ease back into an again thriving market. With the help of computerized/algorithmic trading, buying and selling can happen in milliseconds, which could potentially boost profit potential.
Long-term effects of a Bear Market
It’s time to focus on the long-term effects of the bear market. Acting emotionally is the last way to handle the highs and lows of our stock values and cash flows. Which leaves us to rely on our risk tolerance, proper allocation and diversification. We are told not to put all our eggs in one basket, so why would your financial advisor? As one solution, the 401(k) Optimizer® provides the opportunity to help investors get the most of their retirement plan given their goals and risk level. When the markets begin to transition, whether it be during an uptrend or downtrend, we aim for the opportunity to help your money grow long-term.
The 401(k) Optimizer® – Reaction to Bear Markets
The 401(k) Optimizer® has formulated a system meant to actively mitigate as much loss as possible in your 401(k) and/or other sponsored retirement account. As aforementioned, volatility shows its face when markets experience changes or new developments, i.e. covid-19 and our upcoming election. These changes are expected, but in order to keep in pace with the main players, having a professional as well as an insightful firm in your corner could be a beneficial decision for you as an investor.