Never fear! Embrace the bear!

This is a picture of my son, Theodore. Called by his father, Theo. Called by his mother, Teddy. Among our friends and family it's a mix of the two. For my wife, the name Teddy allows her to add 'bear' at the end, creating the cute moniker 'Teddy Bear'. My big lug of a son lives up to the title. He's large for his age, moves in a lumbering motion, raids our fridge and destroys whatever is within arm's reach. My wife has fulfilled his bearish destiny by buying clothes with pictures of bears and encouraging him to favor 'Sunny', his literal teddy bear, over other non-bear stuffies.

Now, I don't mean to call my wife out, but prior to the birth of my son she hated bears. She thought they were ugly, dangerous and added little value to the animal kingdom. She thought they should be removed from the planet. Ok, I made up that last part. But when a little person (whom she was predisposed to love unconditionally) entered her life and fit the persona of this animal better than any other creature....well, she decided to embrace the bear! Yes, they can sometimes be dangerous, but with a change in perspective, they hold a new respect in my wife's eyes.

What in the name of Grizzly Adams does this have to do with finances?? Well, if you haven't noticed, the world seems to be coming to an end because of the impending bear market (if we are not already in one). The skies are falling, according to pretty much every financial news network.

I'm excited about the bear that it's here. The reason is that we knew it was coming. It was not a matter of if it would, but when. History tells us that we would have to live through several bear markets in our lifetimes and with the seven year bull market we've experienced, the bear was right around the corner. So why am I positive? For the past few years, with the anticipation of the down market there has been nothing but dread and doom and gloom promoted by the media outlets. 'The worst is coming, how bad will it get? Stay tuned to find out!'.

We'll it's here. We are actually in the ninth month of the bear market, or correction, or whatever you want to call it. (May 2015 was the high). As far as I can tell, we're all still here. The unemployment rate is still low, new jobs are being added, and people still have the ability to save. The sky, as far as I can tell, is not falling. While the markets certainly could still go down even further, history has shown they will eventually go back up. And while we have been dreading the downturn, we can now look forward to the upward bounce that will eventually happen. I compare this feeling to a big purchase (home, vacation, car). You may dread spending the money, but if it's for a good purpose, once you've completed the transaction you get to enjoy the spoils of your hard work.

So, while you have the right to be riled up by seeing balances go down, if you have committed to your goals and planned accordingly, a bear market is bearable nuisance (see what I did there!). Bear markets are were the smart investors are separated from the undisciplined. It's easy to save, invest and stick to your goals while the markets are posting in the green month after month, but it's when there are long periods of red that investors prove how disciplined they can be. The bear market is when financial plans are made or broken.

It should come as no surprise that I recommend little to no changes to a financial plan during bad times. Here are some bear market truths so you can see why they should simply be accepted:

-Bear markets happen. In nearly half of the years since 1950 the markets have seen a double digit correction at some point in the year. Investing carries's a something an investor must deal with.

-The definition of a bear market is completely arbitrary. You can find definitions that describe a bear market as a drop of 20% and a correction as a drop of only 10%. Who decided these numbers and why? I don't know. Does an actual benchmark matter? Not really.

-They are difficult to predict. There is not a single technical or fundamental piece of data that will predict when and why investors decide to panic. Also, 'pundits' are usually wrong. Several predictions of the upcoming bear market began in 2010.

-Bear markets are when real investors are made. Most people assume people make money by doing the right thing(s) during upward market movement. The most important decisions are made by not doing the wrong thing during downturns.

-The markets are a very broad narrative of what CAN happen to the markets, not what WILL happen. Each cycle is different and we must accept and plan for multiple outcomes.

Focus on your goals, focus on your goals, focus on your goals! Proper planning considers the affects of down markets. Your job is to avoid drastic reactions and panic, and stay the course. My job is to make sure you do.

Now if you'll excuse me, my son has gotten into the picnic basket.

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