Bear markets - strategies for coping

Reg_Smeeton

Inspired by today’s Monevator post... this is my second experience of a bear market as an investor. The Covid drop and recovery was so rapid, that with the added distractions of the pandemic, it hardly touched the sides. I’m possibly a bit better off than some others in this bear market as I’m slightly overweight on UK and Value stocks which are holding up well, but have to admit I’m starting to get the niggling feelings in the back of my mind that are chipping away at my motivation. I think it doesn’t help that I hit a personal finance milestone about four months ago and despite further contributions I’m now below it again!

Do other posters feel this? If so, how do you cope with it?

bostonerimus

Don't fixate on the "value" of your investments. Make sure your asset allocation is appropriate...but you should have done that when you set things up...and rebalance when the allocation deviates by your threshold ie maybe +/-5% or +/- 10%.

dunstonh

. this is my second experience of a bear market as an investor.

The Asian crisis was my first real one. Followed by the dot.com period. Followed by the credit crunch, followed by 2015/16. Followed by 2018.  Followed by 2020.  Followed by this one.

but have to admit I’m starting to get the niggling feelings in the back of my mind that are chipping away at my motivation

Another way to look at it is that the current period losses are less than all of those loss periods mentioned above.

Do other posters feel this? If so, how do you cope with it?

I'm relaxed on the markets as they are doing what markets do.  Been there, done it. Will do it again and again and again.

I feel sorry for cautious investors as they have suffered losses that are far higher than is typical for 90% of periods. i.e. they have had that 10% period hit.   And with equities falling just after gilts started to fall, the lower risk investors are actually worse off than many higher risk investors.    For medium risk investors and above, this loss period is within typical tolerance.   For lower risk investors, it is outside of the normal loss periods they will see.  It is a generational event for them.

JohnWinder

‘I’m possibly a bit better off than some others in this bear market as I’m slightly overweight on UK and Value stocks which are holding up well,’.....
‘I’m starting to get the niggling feelings in the back of my mind that are chipping away at my motivation.’

No I don’t feel that, so perhaps I can’t help.
I’m confident from your posts that you’re an informed enough investor to know that your investing is for some years to decades. So it is pointless to be concerned about changes that are only months long now; in fact if they are price falls and you are still in the buying phase then you should be thrilled to be getting things cheaper than otherwise.
Similarly you should not be relieved your overweight UK and value stocks are holding up better than others because over the next 25 years they might be the under-performers, because that’s the period that counts for you. Choose a sensible portfolio and concern yourself with things you can control, like costs and savings rate.

renegade1

* Don't Panic
* Increase contributions (things are on sale!)
* Don't look at performance daily
* Don't read posts by Type_45 on thread Economy crash =/= stock market crash?

That's my 2 cents 

Dandytf

Charlie Munger time...Don't do anything.

Alexland

I have no need to sell anything so the price other people are trading at is of no consequence other than that my new contributions and divi reinvestment are buying more units so eventually the investments will bounce back higher however long that takes no hurry still plenty of time ahead where I would rather be buying at lower prices. Dips like this or deeper are needed as buying at high prices is unhelpful towards the superior long term returns we seek.

masonic

As above, what matters is what your investments are worth when you eventually sell them, not now. You are a part-owner or many productive companies which will produce goods and services that, when sold, provide a stream of income, used either for reinvestment to grow the business, or paid out as dividends to investors. There will continue to be demand for most of these goods and services a long way into the future. Inflation will tend to drive prices up, and these companies will tend to charge more for the goods and services they produce. Some have inflationary price rises baked into their contracts with their customers. Companies will rise and fall, but consumption is here to stay. Creativity and innovation have a long precedent of allowing companies to grow their earnings over time.

k6chris

Do you panic when the value of your house goes down?

"If in doubt, do nowt" as a Yorkshire firend of mine often says!

Zola.

https://twitter.com/1PageFinance/status/1543163226002599936?t=znar_gISeMCj_HXUlmvKGQ&s=19

dharm999

Reg_Smeeton said:

Inspired by today’s Monevator post... this is my second experience of a bear market as an investor. The Covid drop and recovery was so rapid, that with the added distractions of the pandemic, it hardly touched the sides. I’m possibly a bit better off than some others in this bear market as I’m slightly overweight on UK and Value stocks which are holding up well, but have to admit I’m starting to get the niggling feelings in the back of my mind that are chipping away at my motivation. I think it doesn’t help that I hit a personal finance milestone about four months ago and despite further contributions I’m now below it again!

Do other posters feel this? If so, how do you cope with it?

I found the article in Validea that was in the Monevator post this week helpful to crystallise my thoughts

https://blog.validea.com/the-three-levels-of-conviction/

like you I am re-evaluating where I am, what I invest in, but am trying to stay focussed on the end goal, stopping full time work within a couple of years