What to Do for Young and Old Investors During a Bear Market

On Monday, the stock market experienced its worst fall since 1987 . While the market is currently trying to rally, investing will definitely be more risky than usual for a while.

Now that we’re in a bear market, what do you do with your money? It may depend on how old you are or how soon you might need the money.

If you are a millennial (or so)

CNBC offers a three-pronged strategy that we believe is especially beneficial for people who have more time to retire.

Get your emergency fund first

If you don’t have enough money to cover at least three months of typical expenses, make it a priority. The last thing you want to do in a bear market is to pull out money to cover your basic living expenses; you want to leave your investments exactly where they are and give them a chance to grow again. (Remember that stock losses do not count until you sell .)

Continue dollar value averaging

Invest regularly, whether the market is going up or down. As CNBC’s Karen Gilchrist says, “Time in the market is more important than time in the market.”

Choose low-cost index funds or ETFs

Choose investments that cover the entire market instead of hoping to get lucky on your chosen set of stocks.

If you are closer to retirement

What about people who are a little closer to retirement and think more about getting their money out of the market than investing?

Money.com offers this advice:

Try to hold out until recovery

The market is likely to go up again. Maybe earlier than we expected! Selling now means locking in your losses before they have a chance to turn into profits again.

Sell ​​Fixed Income Investments and Bonds First

If you need to sell some of your investments to cover the cost of living, start with the ones you lost the least. If you are selling your investments and fixed income bonds, but you still need to get money out of the market, choose the most profitable stocks.

Remember that I am not a professional investment advisor, so be sure to talk to a financial advisor (preferably a trusted person) if you need specific advice on how to manage your investment portfolio.

If not, set aside the cash needed to cover any upcoming emergencies or living expenses, keep investing if that’s your problem, and try not to sell any stocks until the market recovers.

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