With news reports saying the markets are nearing “bear market territory,” people are starting to ask us what that actually means. Let’s start with definitions: “A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more.” “Bear markets also may accompany general economic downturns such as a recession.”
How does that affect you? It depends on where your savings are. If you have invested directly in the stock market, you are at risk for this type of decline in the value of your portfolio. On the other hand, any savings you have put into accounts such as fixed index annuities don’t lose money when the market declines. That’s because FIAs are not direct market investments. While you can make money when the market goes up, you will not lose money when the market declines. Call us, we’ll explain this in more detail.
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