Strategies to survive a Bear Market
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All right, what if, we’re gonna play the what if game today for investors, what if we are in a secular bear market? I’m gonna lay out some scenarios here. I do happen to think that there’s a good chance, there’s a good chance that based upon the current polls I see right now in the direction the Republicans are going, I think that Joe Biden could get reelected. Or if they decide to discard him, maybe it’ll be Gavin Newsom, I don’t know.
We get more state run capitalism under the Biden administration. We talked about that. Joe Biden is actually gonna give his Bidenomics address today as he basically kicking off his campaign. So let’s just say we are in a secular bear market. Meaning what? Meaning market goes sideways until 2026. Get your arms around that. Cause it could happen. It most certainly could happen.
And again, I don’t think the probability is 50-50, but 30-40? Yeah, I’m telling you right now, market could go sideways until 20-26. It’s most certainly a possibility. I know we’ve had a nice run up this year. Then again, it might not. So what do we do? What should you do? Again, one of the things, and I’ve been through these secular bear markets plenty of times.
throughout my history, I don’t bear them really, no pun intended, bear them any mind. We own companies and you should own companies in your portfolio that pay you to own them. Example, dividends, dividend power. We’ve talked about the power of compounding. It’s rule number one, compounding is the royal road to riches. Now, if you take a look and we are all well aware of the,
the major technology companies that have driven the NASDAQ and the S&P to a great degree this year, there’s a lot of companies that have kind of, eh, fallen by the wayside. They haven’t really done much. And they all offer up tremendous opportunity when it comes out, well, all but many of them open up tremendous opportunity in regards to dividends. And if you’re investing for the longterm and you’ve got companies in your portfolio at points in time.
might not go anywhere, but you’re getting paid to own them and you’re reinvesting those dividends on a regular basis. That’s compounding. Compounding works every single time it’s tried. And one of the things I’d like to get across to people is the fact that if you were to take a look, stocks have outperformed every other asset class over the long run. Actually, Jeremy Siegel from Morton put together some unbelievable charts.
when it comes to this over the years and comparing everything, bonds, gold, currencies, whatever it may be. And stocks blow everything away. It’s not even close. Equisable, everything away. And most people fail to realize that the bulk of those returns over the long run have been due to dividends and reinvesting them. I always like to recommend people and I’ve written plenty of columns about this and I always use this when I talk to…
young people about the importance of saving and putting money away. Play with a compounding calculator. Just play with it. It’s fun. And talk about what if. This great what if stuff where you could you punch in and you know initial dollar amount. You can punch in money that you’re going to put away extra money going to put away every year and put in a real conservative rate of return and then see what that’s going to be.
five, 10, 20, 30 years down the road. Compounding, actually think about it, that’s what makes spending time in the market the most important thing. Rather than trying to time the market and rather trying to guess what’s gonna happen next, don’t, don’t time the market, spend time in the market. By doing that and letting compounding work its magic,
For crying out loud, Albert Einstein for crying out loud, called it one of the man’s greatest inventions. Let it go to work for you. So again, we might go through a period of time. I said, I don’t know. I don’t know who’s gonna win the next election. This is the important thing that you gotta understand about what we do here at the Watchdog on Wall Street to what we do at Markowski Investments. Okay, we don’t take flyers or try to guess what’s gonna happen next over the short term.
We don’t allow elections or the Federal Reserve to determine how we’re gonna go about managing our clients’ money. Why? Because guess what? It’s a guess. It’s a coin flip. You could be wrong. We know what works and what works over time where we can be consistently right. And if you apply that and that way of thinking to everything that you do, you’re gonna have a great portfolio. Watchdog on wallstreet.com.
