Of Bull and Bear Markets
By Dr. David Edward Marcinko MBA CMP®
A bull market is generally one of rising stock prices, while a bear market is the opposite. There are usually two bulls for every one bear market over the long term.
More specifically, a bear market is defined as a drop of twenty percent or more in a market index from its high, and can vary in duration and severity. While a bull market has no such threshold requirement to exist, other than they exist between these two periods of sharp decline.
Whither the Bear?
As a doctor, your action plan in a bear market depends on many variables, with perhaps your age being the most important:
In your 30s:
- Pay off debts, school or practice loans.
- Invest in safe money market mutual funds, cash or CDs.
- Start retirement plan or 401-K account.
In your 40s:
- Increase your pension plan or 401-K contributions.
- Stay weighted more toward equity investments.
- Review your goals, risk tolerance and portfolio.
In your 50s:
- Position assets for ready cash instruments.
- Diversify into stock, bonds and cash.
- Maintain 3 years of ready cash living expenses.
- Reduce, but still maintain your exposure to equities.
- How to prepare for the next bear market – MarketWatch
- The Case For A Bear Market In US Stocks Growls On
- Near Certainty A Bear Market Has Started
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
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