09 ~ Investment,finance for businesses

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You're more vulnerable during market declines.

As the saying goes, "It's not if, but when." Bear markets (and recessions) are a fact of our economic system and while most are not as severe as the recession of 2008 and 2009, they still happen.

A bear market is defined as a 20% or more drop in stock market value. While past performance is no guarantee of future results, historically, the stock market has always come back after a bear market run, and usually over a relatively short time period. However, if a bear market hits when you need to withdraw money from stock-based resources, it can be devastating to your retirement savings. And because it's highly probable that you'll experience one to three bear markets during your retirement, you need to be prepared when planning for your future.

Ideally, you don't want to resort to using stock-based savings for living expenses, especially when the market is down. That's why it is so important to diversify your assets according to your withdrawal timeline. You should think of assets as falling into three main buckets:

$---------SHORT-TERM-------------Money to spend in the next 0 to 5 years

$---------MID-TERM----------------Money to spend in 6-14 years

$---------LONG-TERM------------- Money not needed for more than 15 years

Once you have your buckets, you can apply the proper investment strategy for each. They should be set up to meet your needs now, but can be rebalanced over time or as circumstances change. Each bucket should also be diversified based on your overall goals, risk tolerance and income needs.

Setting up and managing this three-tiered investment plan is both an art and a science-and it requires a deft touch to balance both money and emotions. A skilled financial advisor can help you find the balance by providing you with a level of financial confidence while simultaneously helping you combat inflation.




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