Are You Prepared for a Bear Market?

by Ronald Stevenson and Barbara Clark Stevenson, Owners, American Financial Investments, LLC

If you’ve ever visited New York City, you may have seen the famous bull statue in the financial district.

That bull is considered a sign of optimism, indicative of what’s known as a bull market, referring to a time when the stock market is rising and expected to continue to rise, but it can refer to any group of securities in which that is the case.

The flip side is a bear market. A bear market is generally a period marked by pessimism and falling prices in the stock market.

The good news is we are enjoying the longest bull market on record. For more than 10 years, we’ve experienced a rising market that has seen numerous record highs and only a few market corrections to level it off.

While many investors, pre-retirees and retirees have enjoyed the fruits of a long-term rise in the markets, we unfortunately can’t expect that to continue forever. And that means the potential for a bear market exists.

While the causes of bear markets often vary from event to event, many economic slowdowns usher in bear markets.

When we experience a bear market, sooner or later, will you be prepared for it?

One tool we use at American Financial Investments, LLC to help you evaluate your strategy and whether you should stay the course or change it is the Color of Money Risk Analysis. This 11-question self-assessment evaluates your current financial outlook and provides a Color of Money Risk Analysis score.

This is a simple way to categorize your retirement assets into red, yellow and green money, giving you an easy way to see how your assets could be allocated.
Once you’ve received your score, we can analyze how your savings is allocated and make sure that it is aligned with your risk tolerance.

No matter if you use our Color of Money Risk Analysis or another tool, there is value in having an up-to-date understanding of your risk tolerance. Talking to a financial services professional is a great way to get started in that direction.

About the Authors: Ronald F. Stevenson & Barbara Clark Stevenson own American Financial Investments, LLC. They specialize in Investment Planning & Management, Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit, 3112 Clearwater Dr., Suite B, Prescott, AZ 86305