Reviewing Recession Market Trends and Bear Market Strategies In This Economy
September 7, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Darrin Cohen, and I am the CEO of Wealth E&P.
Since early July, the markets had a nice rally into mid-August. However, in the last three weeks, the markets have given most of those gains back. In particular, the three major indices were down about 2-3% across the board last week.
I want to talk to you about bear market strategies and why they're important today. Let's take a look above at 2000 and 2008; this is where the market dropped about 25% and 20% and then recovered about half of that toward the end of the period. Similarly, this year, the market is down about 20% and has recovered about half of that.
Let's take a look at what happened next in 2000 and 2008 in the above chart. Unfortunately, it was followed by a severe drop of 41% and 52%. Now, I'm not trying to scare you, and I'm not saying this is what is going to happen next today. However, it is possible we are seeing a weakening state of the economy and the markets. Our All-Weather score has dropped all the way down to an 8 on a scale from 4 to 40, so we want to make sure that you've got a bear market strategy in place just like we do. We want to make sure that you've got a strategy to get out of the way if there is a severe loss like that.
If you have any questions about this topic, your portfolio, the economy, or if you want a risk profile or a retirement projection, please feel free to reach out, visit www.wealthep.com, or give us a call at (678)-739-0175. Otherwise, stay tuned for our Market Minute next week!
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