Does Your Investment Portfolio Suffer from Ursaphobia?

The Dow Jones Industrial Average lost 20% of its value the week of October 5, 2008. After looking at the damage done during this incredible week in stock market history, many novice and experienced investors began suffering from ursaphobia.

Ursaphobia is not something that has been truly felt by investors since the great bear market of 1973-1974 or the stock market crash of 1929, but urasphobia is back. So what is ursaphobia? The term “ursa” is Latin for bear. The definition of a phobia is “to fear something”. Put them together and you get Ursaphobia – The Fear of the Bear.

Ursaphobia is the fear of the bears and the bear market of 2008 certainly has had a lot of bear sightings. In fact, one of the triggers to current market conditions can be related back to the very first bear sighting. The first bear sighting in 2008 was the tumble of Bear Stearns. The great Wall Street investment firm which fell from glory and was scooped up by J.P. Morgan for a mere fraction of the market capitalization of only a few months earlier.

After Bear Stearns, then came the next bear sighting, the credit crunch. Credit was drying up for both business and consumers. This helped to tight the hold on the market. As the great minds of the Wall Street attempted to solve the problem, the bear reappeared with a vengeance during the week of October 5, 2008 and swiped off over 20% of the Dow Jones Industrial Average.
Here are few points to remember to ensure your portfolio doesn’t suffer from ursaphobia?

#1: Remember we have seen bear markets before and the economy has survived.
#2: Keep on top of your investments. Consult your broker several times during the month or review your statements weekly.
#3: Remember you can’t control the market, so do allow the stress take control of your life.
#4: Review your investment policy statement and make any adjustments to your investment goals.
#5: Consider buying bear market insurance. Bear market insurance include inverse investments and put options. These are investments that are designed to go up in value when the underlying security declines.

These are only a few ideas to ensure you don’t suffer from ursaphobia. Remember the best way to ensure your financial future to stay atop all of your investments and keep in contact with your broker.