Today on the Finance Flash Go! podcast, we are talking bear markets.
A bear market is when the value of the overall stock market drops 20% of more below it’s recent peak values. It is basically the opposite of a bull market.
But bear markets are not uncommon. You will go through them in your investment career.
What’s the most important thing to understand?
The key is to understand the correct philosophy of investing broadly for the long term, not the short term. You do NOT want to sell your stocks in a bear market because you are worried about further drops. This will insure that you are selling low and losing money.
You can help to avoid this by making sure you set your asset allocation to your proper risk tolerance.
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