The Most Important Advice Ever to Surviving a Bear Market

What is the best thing to do when a grizzly bear is chasing you? That’s right, play dead! In a bear market, that is also the most important advice you may ever read. Playing dead means staying put. The worst action any investor can take is to watch the market decline, panic and sell everything. Remember to stay calm, remember your investment goals and.

By playing dead I don’t mean to put your statements in the family safe and forget about them for the next 5 years. I mean you should not make any investment decisions without sitting down and thoroughly reviewing your entire portfolio and fully understanding your entire financial situation. Once you have a good idea of what is going on with your personal finances, you can start to make educated decisions rather than rash decisions.

Instead of watching every spending all day watching the stock market, why not take a walk on the beach or at the park. I don’t mean to be short or unrealistic about this, but if you aren’t watching the market, you can’t get stressed out. If you aren’t watching the market, you won’t make a spontaneous buy or sell. You are playing dead.

Now is a good time to review and update your investment goals and strategies. Sit down with your spouse and investment advisor and review your entire portfolio, your investment plan and your future financial requirements. This is also a good time to review your household budget and make savings a priority. Unfortunately, bear markets also bring increasing unemployment rates.
Even if you have been at your job for a number of years, you still need to review your personal finances. You wouldn’t what to walk into work on Monday morning and find out that your company went of business over the weekend. This is what happened to a number of people on Wall Street that worked with such firms as Bear Stearns and Lehman Brothers.

In addition, to reviewing your household budget, you may want to review all of your insurance policies. These include your home, your car, your disability and your life insurance. Insurance is there for a reason and the reason is hopefully you will never need it. However, during bad economic times you don’t want to have a car accident and be left with an unexpected bill.