Tips For Investing In A Bear Market by James R. Wigen, Sr. Portfolio Manager at IFM

The Stock Market is currently moving towards re-testing the lows from June, what is the strategy now?  As with any market, depending on your personal financial needs from your investments, your strategy may work better if you do nothing at this time, and keep plenty of money in a Brokerage Account Money Market Fund, not in a Checking Account at a Bank.

The one positive of the Federal Funds Rate going up, it means keeping money in a Brokerage Firm Money Market Fund pays you a higher Yield.  Unlike a Checking Account, which pays you nothing to keep money in Cash, Brokerage Firms offer a Money Market Fund where you can keep Cash out of the Stock or Bond Market, and earn a small amount of income as the markets correct.

The higher the Fed increases the Federal Funds Rate, you earn more income from sitting in Cash, thus, reducing the urgency to move your Cash into the market.  If you only need a 4% annual return from your investments, and the Federal Funds is over 3%, you can afford to be very selective as to when to move Cash back into the market.

If the Federal Funds rate eventually gets over 4.5%, and you only need a 4%-5% annual return from your investments, you could look at moving money from the Money Market Fund to a CD, and lock in the 4%+ Yield.  The ideal time to lock into a CD is when the Fed believes their next move on the Fed Funds Rate will be to lower the rate, not increase the rate.

If you are looking to move Cash back into the market, try using the Dollar Cost Average Strategy. and buy VERY small amounts of shares from the best companies in the World.  As investors, our strategy is to Buy Low and Sell High, when markets drop is what we need to Buy Low, however, there is a tremendous amount of uncertainty around the World right, therefore, proceed very slowly with new Stock or Bond purchases.

You should always be reviewing your investments to make sure, even if they are lower now, they give you the best opportunity to grow your investment account enough to meet your financial needs.

If you need help reviewing your current investment allocation, or determining a new investment strategy, please contact me and we will schedule a time to review your investments.  You can email me at J.Wigen@IFManagers.com.

 

James CPM® designation was earned through Academy of Finance and Management or GAFM®

Investing involves serious risks and past performance is no guarantee of future performance or success.  This is not an offer to buy or sell securities and nothing contained herein should be interpreted as a recommendation regarding any investment or investment strategy.  Before making any decision to invest, first read the relevant disclosures and important information provided to you.

Please take the proper risk for your current situation and get the advice from a financial professional who clearly understands your current & future goals and objectives.

Investments are NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE   

All opinions expressed by James R. Wigen on this website are solely his opinions and do not reflect the opinions of IFP Advisors, LLC, dba Independent Financial Partners, (IFP).  Investment Advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Adviser. IFP and Independent Financial Management, LLC (IFM), are separate entities.

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