Reading Time: 5 Minutes
(Voice on screen)
“He turns, he shoots, he scores!!! GOOOOOAAAAAALLLLL”.
“YEAH BABY!!!”
A voice in front of the TV yells.
It is a young man, his face flushed, his voice hoarse – the excitement and relief is palpable.
Suddenly, the young man turns…
Oh, hi there folks – excuse the outburst, been meaning to play some good ol fashioned FIFA for a while now. NEED a break OKAY, deserve it.
Sigh, but since you’re here, I know what it is you’re after… the latest in The Frugal Samurai right?
(Looks at the TV forlornly, where a soccer game is paused mid-way through the second half).
No, no don’t leave… since you’re here, let’s get to it shall we!
First off have to say I am eternally grateful for everyone for their long-time readership of this blog.
I hope you are enjoying it and for anyone who’s stumbled upon this on the inter-webs, I hope you stay and join the many others (fans, followers, devotees, slav… DANCE SLAVE DANCE!!! Sorry, sorry got carried away there) who continue to read and follow my posts.
Means a lot to me that people think there is some value in what I say, contrary to MrsFrugalSamurai’s belief, but WHAT WOULD YOU KNOW WOMAN, is not what I said to her earlier.
Secondly please keep those topics and questions coming through, REALLY appreciate it, honestly – blogging is not as easy as it looks.
I think for the majority of us who post (somewhat regularly), the biggest issue is to always provide good content. Sooner or later you run the risk of going stale or running out of topics to blog about.
I am fortunate in that I have a fair bit of topics stored and ready to go but want to hear what’s important to you!
Which speaking of, today’s post is one asked from my friend Light Beam – he who works in the Treasury department of our federal government.
Light Beam asks:
“Hey, are you coming to the board game party on Saturday? Maybe a bit of Articulate, some Ticket to Ride, maybe even Monopo…”
Oops, wrong conversation.
Here’s the right one.
“Blog on how to survive an investment bear market pls”.
Haha, bears, I love bears – especially cute Teddy Bea…
Geez, what’s with me today…
HOW TO SURVIVE BEARS (market)
Step 1: Don’t panic (and shut out the noise)
When a big, hulking, angry bear comes along – the worst thing you can do is to panic, feel overwhelmed and run away (sell everything).
But CAUTION!
It is commonly accepted that stocks go down x3 faster than they move up, due to a multitude of factors but most impacted by behavioural finance and risk aversion – that is studies have shown that portray us humans, through evolution, we feel twice as much sadness and pain when something is lost than when an equivalent value is gained.
This is genetically passed through the millenniums when our earliest ancestors had to fight tooth and nail over retaining whatever scarce resources that were available in a big, bad, hungry world.
So when a bear market does eventuate and you’re caught up in one – acknowledge it, face it and (try to) rationalize.
If you sell out now, you’ll most probably be selling low and buying back in at a higher price.
This is especially true when the media loves splashing front-page headlines sensationalizing the market drops.
I distinctly remember during the GFC reading via Facebook a forwarded media link from a young lady whom I “appreciated” – who at the time, was working on the equities desk of an institutional bank.
Editor’s comment: I wonder what happened to her? Is she happy? Is she safe? Did she live her life to the fullest? So many questions, so little time (we are no longer Facebook friends – such is life).
Anyway, enough nostalgia… the article I read went something along the lines of:
IS THIS THE END OF CAPITALISM?
In it, the author penned a fantastic argument that the free market world of early 2009 we were living in was about to come to an end.
I don’t remember the exact wording but the gist was to sell everything, stock up on canned tuna and mung beans and ACTUALLY TALK TO THAT YOUNG LADY WORKING ON THE EQUITIES DESK, so near yet so far… or something like that alright – my memory is hazy at times.
Needless to say, this article caused a bit of a sensation, akin to as if the economic maelstrom wasn’t burning strong enough, here’s a bit more tinder (the flammable wood not the sexting app) to burn it stronger.
Of course, in hindsight, that was the best time to buy.
So now, I don’t read the mainstream news anymore – unless front page sensationalist headlines about the world ending make their appearances again, in which case I WILL be buying.
Step 2: Think, (wo)man, THINK
Once you’ve faced reality, the key is to calm down and THINK.
I mean, bear markets are scary, trust me – I’ve been through one myself during the GFC (read here), lost a stack of money but gained some valuable insights.
One of the major mistakes I made was that I did not stop and really think HOW the investments I made were affected.
The shares of that funeral operator with virtual monopoly over the market? SELL – cos yknow, somehow people will stop dying during bear markets right?
The shares of that healthcare operator with a patent over a ground-breaking technology to be introduced worldwide? GET OUT – people will stop being sick during bear markets right?
That no-name miner in the middle of nowhere unable to secure any financing for it’s projects? HOLD – it’s so cheap, it’ll come good, our lotto ticket baby!
The off-shore property developer close to breaching its debt covenants? HOLD – people will always need more housing right? (Right, but not right during a housing-related financial crisis).
If you can hold your nerve and think it through properly, apply a bit of common sense and really think through your investments, you’ll see that investing is actually just a game. One in which most people think is too hard to win…
~~~
Speaking of game… I… I really hope you don’t mind but is it alright that I get back to the FIFA game I’m playing?
It… it’s so rare that I have any time for ANY computer games these days and yknow it’s not every day the mighty Scunthorpe United F.C is winning against Man United in the Carling cup quarter finals…
So indulge me please, just a little – I’ll make sure to finish off Light Beam’s question with the remaining steps.
Promise!
Sound good? Great, see ya next time! (The young man rushes back to the TV)
“Welcome back, everyone. The score is now 2-1, what an amazing game we are seeing tonight…”
What do you think? Did you enjoy this post? Please help me out if you enjoyed this and put your email in and click on the little “subscribe” button at the top right. This way, you’ll never miss my words of awesomeness! So do the right thing, be a subscriber and get it straight to your inbox fresh out of the oven!
44 Comments
Alexandra
A really interesting post, thank you! Quite ideal for me to come across, as I have recently started helping a family member with their share portfolio. I appreciate your advice!
The Frugal Samurai
You’re welcome! Hope you took a little bit away with you, good luck with helping that family member! Thanks for reading.
Kaylee | The Word of the Wild
I just started building a portfolio and this is definitely helpful (no matter what MrsFrugalSamuri says).
The Frugal Samurai
FINALLY, someone who agrees with me! Haha, good luck with your portfolio – it ain’t easy but hopefully this gave you some insights! Thanks for reading.
Denay DeGuzman
I am so hesitant to invest in the stock market. I let my husband handle all of that. The ups and down can really stress investors out! For me, real estate is a safer-feeling investment.
The Frugal Samurai
Yeah it stresses MrsFrugalSamurai out as well! But more so cos of my rollercoaster ride of emotions. But ONE HUNDRED PERCENT agree with you – real estate, is personally, much less volatile… but yknow – why can’t we have both! Thanks for reading!
MK
You missed a gif opportunity with your actual bear images.
Daaaaaa Bears
https://media.giphy.com/media/xaIZ2lXqOGRdS/giphy.gif
The Frugal Samurai
NO NO NO!!! You’re RIGHT! Hahaha thanks for the heads up on these!
Latte Lindsay
I avoid the stock market. I don’t understand it and I’ve no money 😀 I’m safe from the bears!
The Frugal Samurai
Yes you surely are! Very wise to avoid what you don’t know. Thanks for reading!
Joan
I know nothing about the stock market, I leave that to my husband and he can explain everything later.
The Frugal Samurai
Haha, does he explain later though? Next time ask him to explain how it works properly! Thanks for reading 🙂
Jessi Joachim
Stay calm, don’t panic! This is some excellent advice for a lot of things in live, but really works well for surviving a bear market.
The Frugal Samurai
Thanks for reading! Yes agree, can be applied to many aspects in life also!
Fely
I feel like this is so stressful but I definitely need to start looking at it now that I’m in my 30s. Definitely a scary game.
The Frugal Samurai
It can be a bit full on but hey end of the day don’t stress too much about it! Just learn more and we all won’t be so scared anymore!
Amber Myers
Ha, this is a fun post. I don’t know much about investments. I really should learn more about it.
The Frugal Samurai
Thanks for agreeing with me, it IS a fun post hahaha – but seriously, we should all try and learn a little bit more about investing, just to stop being ripped off by the man! Thanks for reading also 🙂
Natalia
I’ve got no experience when it comes to investing my money so I rather avoid stock market. However, it was great to read your article, maybe I’ll try it out in the future when I get to know more about this particular subject. 🙂
The Frugal Samurai
No problem, it’s not for everyone for sure – but hey it doesn’t hurt to learn abit about it right! Thanks for reading.
Ann
What an interesting post! I dont know if I can follow your tips lol! I would surely pass out in such a sitaution.
The Frugal Samurai
Oh nono, don’t pass out! Haha, it’s not as intense as I make it – but yeah, can be pretty shocking at times. We all have to be prepared tis all! Thanks for reading.
Bindu Thomas
Interesting read! This is really a new thing for me. Thanks for sharing.
The Frugal Samurai
No problem! Thanks for reading and hope you got something out of it!
Anjali W
This is such an interesting and engaging read. My husband is the person who invests in stock markets, I really don’t know much about it. Nevertheless I totally enjoyed reading your post and got some knowledge too. Thank you!
The Frugal Samurai
No problem! I hope your husband guides you both to a clear financial path, but sounds like he would right? You should learn when you can, it’s very interesting! Thanks for reading.
Carli Roberts
This is very interesting to me. I have never really gotten into stocks and such, but I have always been intrigued by it.
The Frugal Samurai
All good! Glad to see that you liked it, hopefully learnt a couple of things! Thanks for reading.
Alvern at Success Unscrambled
Okay so maybe it is time I stop procrastinating and open my paper trading account and get practising for when the bear goes away and the bull returns sometime next year.
The Frugal Samurai
That’s true! And with paper – it’s just play money… ooo you think the bulls will return next year? Hope you’re right there! Thanks for reading.
Ching
My mom is the expert in stocks and she actually helps me invest. I do however want to give you 4 bear paws up for the creative easy to presented this information! I was engaged!
The Frugal Samurai
Thanks for saying so -hope you enjoyed it and thank you for your kind words! Great to have your Mum help to invest!, it certainly helps 🙂
Sigrid Says
I was wondering what is a bear market? hehe thanks for sharing your experiences, which included your failures. I honestly don’t have the stomach to invest in such. hehe To stressful for me.
The Frugal Samurai
No problem, happy to share both the good and the bad! How we all learn right? I know, I know – investing FREAKS ME OUT as well haha! Thanks for reading.
Echo
I love the way you worded this and I thank you for your advice.
The Frugal Samurai
No problem thanks for reading! Glad you enjoyed it.
Katie Beck
Great ideas! And after reading this…I am super thankful my husband is a broker and the one in charge 🙂
The Frugal Samurai
Haha, thanks for reading! Lucky you, to have a broker husband – you guys should be pretty sweet then, all over this!
Tiffany
Investing can be super intimidating. What a fun way to ease tensions about it, I love all the bear references, it was a fun way to learn!
The Frugal Samurai
No worries, thank you for reading! Glad you liked it – yes it can be very intimidating but we all have to start small right!
Summer MItch Ryan
In the beginning I was like “what?! what is this?” I find this post entertaining and definitely interesting. I’m trying long and short term investment but not the stock market.
The Frugal Samurai
Hahaha yeah it can be abit like that, I’m too zany at times right! Nice one – what are you looking into can I ask?
Kiwi
I wont lie investing is an interesting and intimidating world. Maybe one day I will dabble into it.
The Frugal Samurai
You should! It’s how we can all make a better future for ourselves, first step is to get educated and you’re starting to, well done! Thanks for reading.