Bear Market Investing

As the stock market continues its bear market rout, more and more Americans are interested in entering the market. A recent survey found Gen Z to be the most interested, which is a good sign as they have more time to recoup any potential losses. But is now a good time to invest? No one can know that for sure but with major indexes off of their market peaks by 15–20% value can be found. Tesla is down nearly 70%, Amazon is down approximately 50%, Alphabet is down approximately 40%, and Apple and Microsoft are approximately 30% down a lot of big names and a lot of value.

Many stocks haven’t seen these types of declines since the Great Recession. Assuming the market recovers, it might be decades before you see these names at these values again. Buying in a bear market is easy the hard part is holding till we return to a bull market or at least till you make a decent profit on your investment.

Bull or bear market, the question remains what is your risk profile? With many stocks down so much, they are more attractive as they have more potential upside on an upswing, but ETFs (diversified bundles of stocks) also look good as they lower the risk not relying on one company, but even bonds look attractive in this high rate environment with a steady payout and no potential loss of investment.

I’m personally a low-risk investor focused primarily on bonds and ETFs, but with stocks, at this level of discount, they are a bargain. While the S&P has annualized gains of 11% since 1928, (and there are plenty of ETFs that track it) individual stocks give a chance for a higher return but of course losses are also possible. Whatever you decide on stocks, bonds, ETF, or Crypto, be informed and don’t invest more than you are willing to lose and stick to a strategy to maximize your wealth.