Okemos financial strategist gives advice for navigating a bear market
OKEMOS, Mich. (WILX) - It’s only Tuesday and it’s already been a bad week for most people with a 401(k). The stock market has lost more than 4% of its value in two days.
The week’s drop on Wall Street has a lot of working families worried about their retirement plans, wondering if their 401(k)’s are at risk.
Brice Carter is a financial strategist from Okemos. He said we’re in a bear market, which is when the market loses more than 20% of its value after an incline. It’s something he said we’ve seen before.
“On average, a bear market happens once every four years, and on average depending on how deep the bear market is, it typically lasts greater than 12 months,” said Carter.
Carter said we’re about five-to-six months into this trend and we still have a long way to go. He said in times like this, people tend to mistakenly act out of emotion with their money.
“So I think one of the biggest things is just having a plan, staying with your financial plan and not altering anything based on these day-to-day, year-to-year fluctuations,” Carter said.
Economic factors like the Russian-Ukraine war and trying to recover from a pandemic have created issues like inflation and high gas prices all of which have led to a bear market.
Financial advisor Mark King said he tells his clients to ride out downturns in the market, while Carter said you can also find ways to lessen the blow before it happens.
Carter said, “So the best way to prepare for market downturns and adverse investing climates is to have cash set aside.”
He said although cash does not gain interest and can be affected by inflation, it won’t disappear if the market drops again.
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