{"id":1602,"date":"2018-09-20T08:00:59","date_gmt":"2018-09-20T08:00:59","guid":{"rendered":"http:\/\/investspectrum.com\/uma\/?p=1602"},"modified":"2019-04-08T17:44:51","modified_gmt":"2019-04-08T17:44:51","slug":"the-next-bear-market","status":"publish","type":"post","link":"https:\/\/investspectrum.com\/uma\/the-next-bear-market\/","title":{"rendered":"The Next Bear Market\u2026."},"content":{"rendered":"

I recently spoke to a prospective client who told me a story of a regrettable decision he made over ten years ago.\u00a0 His advisor of many years was retiring and recommended that he talk with someone at Spectrum Financial about active management.\u00a0 He never made the phone call.\u00a0 Instead, he decided in late 2007 to invest his portfolio with a local advisor who was a good friend of his.\u00a0 His entire portfolio was invested in an S&P 500 Index fund.\u00a0 A few months later, in early 2008, his real estate business started slowing down with the weakening economy.\u00a0 In early March of 2009 his equity portfolio was down over 50%.\u00a0 His advisor told him everything was going to be just fine, that \u201cthese things happen\u201d.<\/p>\n

In 2007 there were over 31 million retired workers receiving Social Security checks.\u00a0 Many of them relied on their investment portfolios to supplement their monthly fixed income checks. Investors have always been told that withdrawing 4-6% annually in retirement is fine to maintain principal.\u00a0 With the severity of the 2008 market losses, many workers who were ready to retire had no choice but to continue working as their retirement savings were obliterated.\u00a0 Investors in the S&P 500 at the high in October 2007 nervously watched as the bear market unraveled and then had to wait almost 5 years before their portfolios recovered from the large losses in 2008.\u00a0 That meant working 5 years longer for many would-be retirees.\u00a0 That, or retiring with a diminished standard of living.<\/p>\n

Notable bear markets over the last 90 years:<\/p>\n