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Scotia Wealth Management

Seven Tips to Handle a Bear Market

THE RICHARD DRI PODCAST

May 19, 2020

Today’s episode features Richard acting as his own guest once more and this time he is offering advice on how to handle a bear market. He begins by first outlining just what constitutes a bear market, and then proceeds to offer 7 tips on what you should and perhaps shouldn’t do during a market downturn such as the one that has just taken place in March 2020.

LISTEN TO THE PODCAST – DOWNLOAD THE TRANSCRIPT

Highlights:

  • Probably the most important tip is to stay the course, but only if you’ve stress-tested your asset allocation and you know that you can withstand a market downturn.
  • Many studies have shown that if you consistently rebalance your portfolio, your long-term investment performance will improve.
  • It is recommended that you have a minimum of three to six months worth of cash reserves, which you don’t touch unless you really have an emergency.
  • Harvest your tax losses.
  • Try maintaining your philanthropic commitments.
  • Have a momentum strategy.

Quotes:

“You will thank yourself for not having made any radical changes to your portfolio during the market declines.”

“Instead of panicking and selling your individual stocks, use the historical evidence that is out there.”

“Make sure you have enough cash for this particular event that is an emergency.”

“If your main concern is a decline in the value of your stock portfolio, consider yourself fortunate and maintain your charitable gifting.”

“ At the Dri Financial, we developed an investment strategy that buys the market when the S&P TSX trendline is upward and sells the market when the trendline is downward.”

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Listen to more podcasts by Richard Dri:

Financial Planning and the COVID-19 Pandemic: A Conversation with David Victor

My Disaster Plan

10 important issues that all investors need to remember in tough times

 

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