As of late 2018, many US stocks have dipped into bear market territory, here are five questions you should ask yourself when stocks news is gloomy.

1. Are you accumulating investments today? Market pullbacks mean different things for savers versus spenders, and we’ll all likely be a member of both camps over the course of our lifetimes. If you’re working and saving for the long-term, down markets are disappointing but often temporary; and you get the opportunity to purchase your new investment savings at a lower price than you would have earlier.

Prescription: If you’re accumulating, stay the course and ask if you have more available to invest.

2. Are you in withdrawal phase? Retirees spending their nest egg and others who have a goal in mind for funds currently invested should be sure they have an appropriate spending plan that takes stock market’s ups and downs into account. Time-tested strategies include setting aside cash in advance of short-term needs and taking more of your withdrawals from bonds rather than stocks allowing for potential market recovery and keeping your portfolio balanced.

Prescription: If you’re planning to need money in the short-term, make sure you have a plan as to how you’ll access the funds regardless of market ups and downs. Keep your plan fresh and relevant as your circumstances change.

3. Have you diversified appropriately?  Your mix of stocks and bonds can make a big difference when markets bounce around. What’s the right mix? It depends on your age, your plans for your investments, and your general tolerance for risk. Be aware of factors that might make your investments riskier than the stock market, in general, such as concentrated stock with a single company like your employer or something that has done very well for you.

Prescription: If it’s been a while since you’ve reviewed or rebalanced your investment mix, take some time to evaluate your position. Consider seeking the advice of a financial planner to understand the way your money is invested.

4. What has history taught you?  Experts in behavioral finance – how people act or behave with money – suggest that reflecting on past circumstances where investing has been challenging can help investors understand how emotions are affecting their investment decisions. Reflecting on past experiences and lessons learned can help to keep your pulse down.

Prescription: Keep a journal and reflect back on other times when markets were down, and you were concerned. If you notice you’re particularly anxious now, write down your thoughts.

5. Are you tempted to change the course?  It’s natural for investors to feel like they need to do something different when returns are working against them. Counterintuitively, frequent adjustments to your plan often create a path leading to disappointing investment performance. You’re not alone if you think there’s a better option out there.

Prescription: If you’re thinking you might veer off course, avoid alarmist headlines and seek the counsel of an experienced financial planner to evaluate your big picture situation and the goals you’re seeking to achieve.

Our team at Pearl Planning is available to help – reach out to us at 734.274.6744 or e-mail Melissa.Joy@RaymondJames.com.

Any opinions are those of Melissa Joy, CFP® and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. This information is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. There is no assurance any of the trends mentioned will continue or forecasts will occur. Past performance may not be indicative of future results. Dollar cost averaging does not assure a profit and does not protect against loss. It involves continuous investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low price levels. Though it can mitigate risk in a portfolio, diversification does not ensure a profit or guarantee against loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Investments mentioned may not be suitable for all investors. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.