Bear Attack
I have never been attacked by a bear, but I can only imagine it must be horrifying. However, I have been attacked multiple times by a bear market. As an investor, this can also be horrifying. So what can the wise investor do? Interestingly, the strategies used in a real bear attack can also teach us how to approach a bear market.
Note: A bear market is when a market experiences prolonged price declines. It typically describes a condition in which stock prices fall 20% or more from recent highs. This results in widespread pessimism and negative investor sentiment.
How to Survive a Bear (Market) Attack
Have you looked at your investments lately? Are you feeling "mauled" by the volatility and drop in account value? If you are feeling stressed, this is normal and natural. You should feel some anxiety when the market drops considerably. However, what is critical during a bear market is not your feelings, but your actions.
The following steps are the suggested actions when encountering a real bear in the wild. A wise investor can do the same when they experience a bear market.
Stay Calm
When you spot a bear (market) near by, the most important thing to remember is not to panic. Bears can sense fear, and if you are scared, they may become more agitated and attack. Countless market corrections have been triggered by a few nervous investors that led many others to sell at inopportune times.
Fight the Urge to Run
Running away from a bear (market) may trigger predatory instincts and cause it to chase you. The equivalent reaction for an investor is to withdrawal their funds. When an investor does so, they "lock in" their losses. Meaning, if you sell in reaction to a market drop, you can never undo those losses. Additionally, most investors are too slow in returning to the market. By the time they believe it is "safe" to venture into the market, the recovery has already passed.
Talk to the Bear
Experts recommend that you sing, shout, or start chatting with a real bear in the wild to show them your are human. As an investor, the equivalent is to call, text, or email your financial advisor. It will allow you to share your concerns, gain some perspective, and be reminded of your long-term goals.
Is a bear market making you feel nervous? Let's talk. I want to hear about your concerns.
Remember: Pressure (or stress) is something you feel when you are not prepared. A significant part of financial planning and successful investing is preparation.
Investing wisely is always a challenge, even in the most accommodating markets. Do you have questions about investing or your financial plan? Schedule a meeting so we can discuss how to handle a bear attack.
Laissez les bons temps rouler
Mary's Recipe Corner
Enjoy this seasonal recipe from Bill's late Mom (which was previously published, but "bears" repeating):
Grandy’s Pumpkin Bread
Bill's mother always went by the name "Candy" because she was such an incredibly sweet person. Our children combined it with "Grandma" to come up with "Grandy." We lost our precious Grandy in 2020, and the world still doesn't seem quite right.
Below is her recipe for what I think is the best pumpkin bread. Grandy used to make this every Christmas for the neighbors and any other people she regularly interacted with. She always wrapped the small loaves in colored Saran Wrap tied with red or green curling ribbon. She added raisins, dates, and nuts to hers, but I tend to add chocolate chips or cream cheese filling (my recipe below).
• 3 cups sugar
• 1 cup vegetable oil
• 4 eggs, beaten
• 1 16oz can pumpkin
• 1 tsp vanilla
• 3-1/2 cup flour
• 2 tsp soda
• 2 tsp salt
• 1 tsp baking powder
• 1 tsp nutmeg
• 1 tsp allspice
• 1 tsp cinnamon
• 1/2 tsp cloves
• 1/2 tsp mace
• 2/3 cup water
• Chopped dates, raisins, nuts (I believe she used pecans)
• (Chocolate chips- an addition I sometimes do)
Preheat oven to 350. Cream sugar and oil together. Add eggs, pumpkin, and vanilla and mix well. Sift together dry ingredients (I never sift these, only mix them). Add dry ingredients alternately with the water to the pumpkin mixture. Stir in any desired mix in’s (or my iteration- pipe cream cheese mixture down the center of loaves).
Pour in 6 small or 2 large well greased bread pans. The batter should fill about 2/3 the pans. I also wipe around the top ridge of the pan to eliminate the oil there which makes loaves that dome without sliding back down the sides. Large loaves take an hour to bake. Test with toothpick in the middle, looking for crumbs on the toothpick and not wet batter. Cool on cooling rack.
These will freeze well, when wrapped in colored Saran Wrap and tied with curling ribbon. 🙂
Optional cream cheese filling:
• 16 oz cream cheese, softened
• 1 egg
• 1/2 cup sugar
Mix well and pipe either in the middle of two portions of batter, or down the top of the uncooked loaf.
Blessings and bon appétit!
Mary
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For Art's Sake
If you grow up in New Orleans you learn to appreciate art (and food and music and parades, etc.), so it's appropriate to share a bit of art with our readers.
The statues depicted below are by sculptor Reinhard Dachlauer (1922-1995), to commemorate the 400th anniversary of the establishment of the Frankfurt Stock Exchange. The Bull represents a strong, rising market whereas a Bear is used to represent a volatile, retreating market. Note that you can ride a Bull, but a Bar will eat you alive.
Besides the impeccable realism, I appreciate how the sculptor conveyed an investing truth: the Bull triumphs over the Bear. The Bull market, even after "bearish" setbacks and challenges, has always eventually returned to dominance.
