File – This is May 26, 2020, the file image is wandering, which is the gray bear gallery in the Woodland Park, for about three months due to the outbreak of the Corona virus in Seattle. The bears were once invaded in the offensive landscape in the north of Kaskids, Washington, but a few have been seen in recent decades. The federal government is canceling plans to re -submit gray bears to the North Cascades ecosystem. (AP Photo/Elaine Thompson, File)Associated Press
Spreading money during the bear market can be difficult as it puts fear.
It is intelligent to have a plan – do not enter the market once, and you do not panic.
Experts suggest buying high -quality profit distribution shares and large technology if the bear market comes.
If you are building a A large cash reserve During the past few years, you are not alone. It is also possible that you are not alone in wishes that you have money in stocks.
CASH has created meaningful revenues since 2022 after the Federal Reserve went on a price disposal, and withdrawing record sums to the money market funds.
The total value in the money market funds-assets of liquid rewards, which generate the return from short-term bonds-7.3 trillion dollars. About $ 2.1 trillion is held by retailers. Even the stock investment icon Warren Buffett A standard cash position of about $ 350 billion is from March.
But the stocks erupted in the meantime. The S&P 500 has risen by 80 % since the decline of October 2022. It was difficult to know the time of entering the market. With the stock market continuously increasing, the level of new reviews has been raised historically in recent years, you may have been waiting for a good opportunity to put this money to work in stocks, pending the decline. If you miss the April diving, you may still do it.
It is not necessarily a bad approach. Goldman Sachs said this week that An opportunity to withdraw from the stock market jumped. In fact, the arrows are so expensive that Vanguard said this Mont said that its perfect wallet over the next ten years is to allocate a very conservative conservation to 70 % bonds and 30 % shares. The cheaper, the better the returns.
But the timing of the market is difficult, and the market positives are usually advised not to try. Nobody knows the period in which the bull’s march or the continuation of the final withdrawal can continue. For this reason, the best course of work may be the average cost in dollar, while continuing to put money on the market at specific periods, whether the market is higher or decrease.
However, if you are determined to wait for a significant decrease to enter the market, it is good to develop a plan in place before that moment arrives.
Although the bear markets in recent years have been short -term, the average bear market dates back to 1932 has witnessed a 35.1 % decrease for a year and a half, according to Stifel Investment Bank.
Charles Schwab says the brokerage company, so take it slow.
“Instead of going every time, one may think of buying small pieces at one time,” Charles Schwab said in a hall on August 6.
Hank Smith, director of investment strategy at Haraford Trust, said, but not too slow. He said there is no way to know when the bottom is, so you want to start taking advantage of withdrawal as soon as it reaches 10 % of the 10 % correction zone.
This may harm if the market ends with a decrease of 10 %, but not decisive at the time of entry can lead to lost opportunities. Remember a decrease in 19.9 % at the S&P 500 from February to April? The pain ended in the blink of an eye, with the index returned at its highest level ever before the end of June-the gathering was angry, as the market rose by 30 % since its lowest level in April.
Smith said that if the market continues to decrease, it’s time to get more aggressive.
“Let’s say that the correction turns into a 20 % bear market, and now you kick yourself in less than 10 %. You can’t do that,” Smith told Business Insider. “You have to say,” Well, this is another opportunity to drink again, “and perhaps with more than you did in 10 %.”
As for the market areas that must be purchased, it is difficult to know which sectors and topics will be beaten more than others.
But Shawab said it is good to follow a diverse approach and start buying all corners of the market.
“It is interesting that traders can diversify their wallets with at least 12 shares, and they target stocks in all major sectors,” the company said. “Although diversification does not eliminate the risk of experimenting with investment losses, it can help increase the chances of obtaining the assets of the best performance and avoid the risk of losing the total portfolio of any company, sector or one sector.”
Merrill and Bank of America Bank said in a 2024 report that quality profit stocks can also provide a temporary store of market losses.
Smith said that the economically sensitive sectors usually give some of the best opportunities that come out of the stagnation market, as they decrease during the retreat and retreat when the economy recovers. Money such as Fidelity Msci Consumer Diserionary Index Etf (FDIS) and Invesco Dormyy Wright Consclecals Momntum Etf (PEZ) exposure to periodic shares.
But he also said that large technology shares are likely to decrease more than others because of their high assessments. He said that if this is the case, it is possible that it is a good opportunity to add exposure to them.
“This is very common in high -growth stocks to get large bulls in the long run,” Smith said. “This is the place where the investor who has a lot of money should wait for a significant decrease in the market.”
