Navigating Market Recession: Strategies for Financial Resilience

Investors should embrace market volatility as an opportunity for wealth-building, not fear it.

### Navigating Market Recessions: Strategies for Financial Resilience
* 📉 "The stock market is down about **two out of every 10 years**, but on average, it trends **upward over the long term**."
* 💰 It's crucial to maintain an **emergency fund** that can cover your expenses during potential **market downturns or job loss**.
* 📊 Assess whether your investment portfolio aligns with your **risk tolerance and capacity**, ensuring you're **comfortable regardless of market fluctuations**.
* 📈 Historical data shows that the S&P 500 has **positive returns 97.4% of the time** over a 10-year investment period, highlighting the **importance of long-term investing**.
* 🐻 Bear markets last around **11 months on average** and can result in a **31.7% loss**, while bull markets last over **four years** with cumulative returns of **nearly 150%**.
* 🧠 Emotional responses to market volatility can lead to missed opportunities; as Peter Lynch noted, **more money has been lost trying to avoid downturns than by riding them out**.
* 💡 Embrace market volatility as a chance to **invest strategically**, taking advantage of **lower valuations** when others are fearful.
* 📅 Stay informed and connected with financial guidance to help navigate turbulent times without making **impulsive decisions that could jeopardize your long-term wealth**.

[Music] all right next question is from concerned citizen 45. If that tells you anything about this question, what should mutants be doing if the market seems on the brink of a recession? Isn't it always? Tell me more, tell me more. I'm just trying to think in my mind the last time that I opened up my internet browser or I looked at my phone and the headline read, Hey, don't worry, everything's fine, things are rocking along, don't be nervous, the market looks fine. It just is not the case. We always live in this place where there's always something to be frightened about and there's always something on the horizon that's terrifying that is going to throw us into the next recession. And yet we know that on average, the stock market's down about two out of every 10 years. I mean, those are sort of rough numbers, but by and large, most of the time, it's going up over the long term. Now, we do know that in year, there's usually like a 14%

decline entry year, but can you control that, uh, concerned citizen? No, you can't control whether the market's going to go up over the next six months or down over the next six months. So, what can you control? Well, you can control your own unique individual risk exposures, the first of which would be like your emergency fund based on your station of life. Do you have enough cash that if the market did tank and if we slipped into recession, you know that you could pay for your bills if you're retired from the portfolio or if you were laid off from your emergency reserves? That's there for that reason. Well, then once you step past the emergency reserves, it's okay, is the portfolio that I have designed matching to my risk tolerance and my risk capacity? Do I have an appropriately allocated portfolio that whether the market goes up 20% from here or down 20%, I feel like I am positioned correctly to participate in that? If you begin to get really, really nervous and you're terrified of the next session.

it's causing you to lose sleep at night. I would argue that perhaps your portfolio allocation does not match where you are in your financial journey. I love talking about always be buying, and let me tell you why. The probability of positive returns for the S&P 500, if you go all the way back to 1937 to just at the end of last year, if you look at it on a day-by-day basis, markets are up 53% of the time. So, it seems like a coin flip on a day-by-day basis. If you can just hold the assets for a year, 77% of the time the S&P 500 is actually positive. Okay, looking a lot better now. Okay, if you can hold the investment for 3 years, that 77% goes all the way up to close to 88%, 887. If you go to 5 years, 93%. If you can stay invested for 10 years, the market, the S&P 500, 97.4% of the time is positive. Here's the

other thing that I always like to share with people is when you look at bear markets versus bull markets because that's what you're concerned about is that bear market where the market loses 20% is that bear market as scary as you perceive it to be or is the opportunity cost which you really ought to be scared of and if you look at the typical bull market versus bear market bear markets last around 11 months on average and they lose on average around 31.7% H if you look at the bull markets they typically last a little over four years and their cumulative total return is a little under 150% very different so the I would tell you what you perceive as the big risk look I love our content team is so good they can put this stuff up um is that you let your emotions keep you away from one of the greatest wealth-building opportunities out there so don't let somebody scare you out of investing now look I have told you guys I don't know what's going

to happen, and I've even told the case study story of. I had a neighbor who came to me in 2021, and he said, Brian, I, I, you know, I've hung out with you a while. You're always talking about investing. Can you help me set up an S&P 500 investment? And I said, Sure, let's do it. And I went, logged into Fidelity with him, set it all up with him. He was doing $5,000 a month. He came to me three months later and said, I shut that thing down after two months because you didn't tell me it could lose money. And so he shut it down. Fast forward, here we are now in 2024. Well, I'm on another trip with this same neighbor, and he goes, Hey, can we have that conversation again? And we went and looked at the, because he only invested two months, that $10,000 had gone up a substantial sum. And I did a show earlier where I talked about the actual numbers, but it was up huge, where it averaged over 10% a year.

um for each of the years, even though the first three months were scary as all get out, that he shut it down because of the emotional part. So here he is firing up the engines of wealth creation again. Imagine if he'd kept the $55,000 a month going for the last 36 to 48 months. You know, as this thing keeps rolling forward, that is where it happens, the consistency of always be buying. Don't let your emotions steal from your future success. I think it was Peter Lynch that said, More money has been lost trying to avoid the next downturn than just participating in the next downturn. And you have to remember that for prevent yourself from applying a permanent solution to a very temporary problem. Now this question was nuanced, Brian, because I want you to speak to this because this was the actual underlying question. What should a mutant be doing or how should a financial mutant be thinking if we do head into recession, if we a downturn? I'd be curious to hear your thoughts now remove

from a second like as financial advisers, right? Because obviously, we care about the market going down, especially for our retired folks, especially for our folks living off there. But when you, as an investor yourself, start to see market volatility, where's your mind immediately go? Well, I get excited. I mean, I've told you guys even, you know, and I know this is the third time. I really try not to do it too much, but in Millionaire Mission, I talk about how having cash when no one else has cash can be a contrarian wealth-building opportunity, meaning that you'll find out that your neighbors, your peers, that there's this when you get into bear market territory. Value gets upended, meaning that what things are worth gets disconnected from the market value or what they're selling at. And if you get those opportunities, this is when Warren Buffett tells you, Be greedy when others are fearful and fearful when others are greedy. This is what he's talking about. You got to be the contrarian that takes advantage and grabs hold when

everybody else is headed for the exits. You're trying to get in there and get some of that, and I think that's a skill set that it's hard for people. And that's why, look, I, I've said it multiple times, it's a disclaimer, I don't know what's going to happen. And here we are in an election year, and your emotions are being plucked on you. You know, the hairs of your emotions are being pulled constantly. And I would just tell you, don't let your political views and don't let that type of stuff influence your financial life and create a blind spot, because you might be surprised that just the concept of humans wanting to innovate and grow is going to be enough to create the wealth. So don't let the news cycle scare you out of your own future wealth. And our commitment to you is we're going to keep doing this content. We're going to keep, even if the markets do get scary, we're going to keep pouring it out to you. So

If you're not subscribed to the channel, make sure you subscribe right now. So every time we put out a new piece of content, you can know. So that way, instead of you making that frightening decision when things get scary, you'll have your best financial friends being the voice of reason, telling you to stay the course.

What Should Financial Mutants Do on the Brink of a Recession?

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Navigating Market Recessions: A Guide for Mutants

Mutants should focus on controlling their individual risk exposures during uncertain market times.

Having an emergency fund is crucial to cover bills in case of a market downturn or job loss.

Additionally, it's important to have a well-allocated portfolio that matches one's risk tolerance and capacity, allowing for participation in market fluctuations.

Portfolio allocation may not align with your financial journey, causing stress.

The S&P 500 has positive returns 53% of the time on a daily basis, increasing to 97.

Bear markets last about 11 months and average a 31.

7% loss, while bull markets last over four years with a cumulative return of nearly 150%.

A neighbor sought Brian's help in 2021 to set up an S&P 500 investment, contributing $5,000 a month.

After two months, he shut it down due to the fear of losing money, but by 2024, the investment had significantly grown.

Brian emphasizes the importance of consistent investing and not letting emotions dictate financial decisions, especially during downturns.

Embracing Market Volatility for Wealth-Building

Market volatility can be an exciting opportunity for investors, especially during bear markets when value gets upended.

Having cash during these times can provide a contrarian wealth-building advantage.

It's important not to let external factors, like political views or the news cycle, influence your financial decisions and create blind spots.

Importance of Subscribing for Financial Guidance

Subscribing to the channel ensures you receive updates on new content.

The goal is to provide financial guidance during challenging times.

Having a reliable source of information can help you make informed decisions and stay on track with your financial goals.