Keep Investing – Your portfolio will thank you!

The Total market is down 21.5% and the S&P 500 is down almost 16% Year to date. The total market is in a BEAR MARKET.

Bear markets – KEEP INVESTING!

A bear market is when one of the indices falls greater than 20% over an extended period of time.

Bear markets are often wrapped with people screaming max fear and serious portfolio pains. People have losses and are afraid they will encounter even more. What do they do to stop the bleeding?

Many times this results in people selling at a loss to stop the pain. Worse, selling THE BOTTOM!.

In some cases, it causes people to stop contributing to their retirement portfolio.

Myself, I had originally sold some of my IRA account off when it crossed the 200 DMA earlier this year. However, I started getting back in around April or so.

I kept the faith and kept purchasing in small lots throughout the year. I turned up the buys in September and October.

Here are how two of my accounts are doing Year to Date:

Brokerage: -11%

IRA: -8.45%

Combined: -10.97%


Brokerage: 16.01%

IRA: 11.21%

Combined: 14.18%

As you can see, had I stayed out of the market for the month of October until now, I would have missed some rather large gains. These gains are responsible for my account now beating the market YTD. A 14 to 16% gain is nothing to dismiss, especially considering the average return is around 6-10%. Moreover, when you take 8+% inflation into account, the greater your gains need to be. Taking the losses of over 20% and never investing since YTD truly was a bad idea.

To offer contrast, I did carry a larger cash position than usual this year. I have been investing heavily in T-bills each month. This allows for diversification of an income stream. It also allows me to pull market from the Treasuries and put it into the market at a later date in time if I wanted. However, this is money I expect to need in the next five years, so it’s not earmarked for that.

In summary, even if you feel a bit apprehensive about investing, find somewhere (even if it is almost risk-less) to invest. Your portfolio will thank you for staying the course. If you stop your retirement contributions or sell, you face a greater risk-Not having enough for retirement.

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