Since 2020 members of the Ruedi Wealth team have been writing weekly investing and retirement planning columns for our local newspaper, The News-Gazette.
Though retirees with a reasonable spending plan can weather a bear market or even multiple bear markets during retirement, if that bear market shows up at the wrong time it can spell trouble.
When people think of the ways financial advisors create value for their clients, their minds likely run to exotic financial strategies and meticulous calculations. But as I look back, the most valuable thing I did throughout my career was convince people who were piling up cash to invest in the stock market.
People often think of generational wealth as a specific large number like $5 million. But generational wealth is actually created by a set of behaviors that work together to maximize the amount that is passed down from generation to generation.
I think when investors buy an individual company they assume their worst case scenario is that the stock price doesn’t very much or at worst falls 20 or 30% in value. But individual companies can fall over 99% in value.
When the market faces adversity in the future, as it inevitably will, investors will once again be tested. At that point though they will be tempted to think “this time is different.” They should instead focus on the fact that “this too shall pass.”
We get a peak to trough decline of 10% or more almost every year. They show up with such a frequency that on our radio show we often refer to declines of this magnitude as the “crosstown bus.”