Opportunities in a Bear Market

Greg Gagne |
  1. With rising rates, look at placing some of your cash reserves into short term CDs in the coming months. Reminder, we suggest a goal of at least 6 months liquid cash. If you currently hold more than that, consider dollar cost averaging some of the additional reserves into your portfolio to take advantage of the market decline.
  2. If you are drawing from your portfolio, please review your draw down percentage. While we typically see a dynamic approach in effort to simplify this blog guidance is to draw 4% or less. Perhaps consider adjusting the draws and your discretionary spending habits during this down turn. This is an ideal time to review your budget.
  3. Tax Loss Harvest – Selling some of the losers in your portfolio as a means to offset future capital gains is a sound method to mitigate capital gains tax related issues.
  4. Rebalance – This is part of a disciplined approach to portfolio management. With the market fluctuations, your portfolio may no longer be aligned the way it was when you started it. This process should occur at least annually.
  5. If you are actively at work and contributing to your retirement accounts consider increasing your contribution rate to take advantage of the down markets.
  6. Conversions of IRA’s to Roth IRA’s.  The decrease in market valuations may make this an ideal time to move investments that you otherwise like over to a Roth and pay the taxes on the suppressed value.


             What strategies are you using during this Bear market?