The last time there was a major bear market was eight years ago. Since then the stock market has been steadily growing and reaching new records on a consistent basis. As a young adult investor myself I am hoping that there will be another bear market soon. Why? Good investing means recognizing opportunities.
Recognize the Opportunity of a Bear Market
A bear market is not a time to panic but instead a great time to start investing. I know this sounds contradicting, after all why would you invest when the value of the market is decreasing? Everyone is a great investor when the stock market is going up but not when it is going down. A great quote by Warren Buffet explains this well “be fearful when others are greedy and greedy only when others are fearful.”
Learning to recognize the great opportunity of investing during a bear market is important. Bear markets produce stocks that are good investments for young adults at cheaper rates. Even if you want to take a sabbatical in your 40s, 10 to 20 years is still enough time for the stock market to turn around and continue to grow.
Think of bear markets as sales on America’s greatest companies.
Buying America’s Great Businesses at Discount
Bear markets should be looked at as a sale of America’s greatest companies. Even if you are just buying mutual funds or ETFs you’re still putting your money into a fund that is purchasing America’s healthy stocks. Even though the economy maybe in a downturn, these great companies are still innovating and trying to grow.
Because you are able to purchase great companies at a discount, you are well on your way to creating long-term wealth.
A Bear Market Can Create Long Term Wealth
Bear markets are short-term and usually, last around a year and a half. After that, they start growing again. If you look at any historical graphs of the stock market you will see that it has constantly grown in a positive direction. Yes, it has what we call the heart monitor effect, the ups and downs of everyday price changes, but over the long-term, it’s still trending upward.
When the markets begin to recover, you will already begin to see your discounted purchases pay off. As the markets rise, so will your investments and your wealth.
Bear markets are not a time to panic and initiate a fire sale of all of your investments. Bear markets create great investing opportunities for young adults. As young adults, most of us do not have as much money to invest so when you can buy more with your money you should take advantage of it. If you want to talk more about investing when it seems like it’s the end of the world I want to help. I understand that it is hard to invest when it seems like you should stay away. But let me help you understand and provide you encouragement to start building your wealth.
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Steven LaFleur grew up in Rapid City, SD and after high school went to college at the University of Nebraska-Lincoln where he majored in finance and met his wife Kelly. After college graduation in 2013 working for the family business for three year, Steven decided it was time to pursue a passion of his in helping people and their finances. Steven is now a financial advisor at True Measure Wealth Management in Omaha, NE. Steven and his wife Kelly have two daughters who keep them busy at all times of the day. Steven enjoys skiing in the mountains and also biking and golfing during the non-snowy months.