After the Bull: Preparing your portfolio for a bear market

After the Bull: Preparing your portfolio for a bear market

No one can predict for certain if today’s bull market is indeed approaching its last hurrah. But either way, it’s important to prepare your portfolio for the possibility that a market correction or even downturn could be on the way.

Here are some steps consider:

Rebalancing your investment portfolio.

Ideally, you should review your asset allocation at least once a year to ensure your desired and appropriate mix of stocks, bonds and other assets hasn’t fallen off course. Near the end of a bull market is an especially good time to rebalance, because your stock allocation may have become severely inflated — risking large declines if the stock market experiences a sudden drop.

Bear-market investment portfolio strategies.

Certain types of investments have outperformed in previous market downturns. Bonds, international and emerging-market stocks, U.S. “blue-chip” stocks and real estate investment trusts (REITs) are a few investments that may be worth considering as potential hedges in case of a broad stock-market decline.

It’s important to consider the effects of a potential market downturn on your portfolio before it happens.


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