Skip to main content

When markets swing, how should you adjust your investment strategy? Bull and Bear markets can lead to different behavior with your investments. But to remain level headed, even in unpredictable markets, download our ebook titled Taking a Comprehensive Approach to your Financial Life.

The independent financial advisors at Dechtman Wealth offer a complimentary consultation to help you get started. We help our clients determine the best investment strategy based on years of experience, tailored to your personal goals.

Larry Light shares more about investment strategies in Bull and Bear markets in the article below. If you have any questions, please contact our wealth management professionals.

Betting on the Bull or the Bear?

Larry Light

With the stock market at record highs, although stalled at the moment, investors must ask two questions: 1) What’s next, and 2) What do I do about it? The ever-sage Lewis J. Walker, a financial planning and investment strategist, has some good guidance here:

The 2008 recession officially ended in June 2009. Yet over seven years later, people still ask, “When we will get back to normal?” In the 2016 elections, both Donald Trump and Bernie Sanders focused on the “low-growth economy” and how to get America back to a robust growth pattern.

No doubt as you plan investment strategies for 2017 and beyond you remember two brutal bear markets, 2000-2002 following the implosion, and the 2007-2009 credit crunch debacle. Is the seven-year-plus market advance growing whiskers, getting long in the tooth? What’s the outlook?

Google “stock market crash in 2016” and several pages of dire warnings of declines up to 80% will pop up. Politico on Oct. 21 proclaimed “a Trump win will tank markets.” Change the Google crash search to 2017 and the same collapse scenarios pop up.

What is “normal” is that markets of all stripes go through cycles and “what if” scenarios must fit your unique profile concerning risk and reward. Nevertheless, speaking to a group of advisors focused on business owners and growth strategies at the Exit Planning Institute in Atlanta on Dec. 15, Professor Roger Tutterow, of the Econometric Center, Coles College of Business, at nearby Kennesaw State University, had an interesting perspective. He delivered a fairly upbeat assessment of overall economic conditions, along with the normal caveats.

For those who will say in June 2017, “we are eight years into an expansion, we must be due for a recession,” Tutterow notes that recessions are not based on a clock. From 1945 to 2009, the economy went through 11 cycles with the average contraction 11.1 months and the average expansion 58.4 months.

Looking at the U.S. stock market run-up after the Trump victory, the professor advised, “Don’t confuse the stock market with recession risk,” which he sees as a bit higher compared to two years ago. If we get a recession in 2017 or 2018, strategies should be in place that would allow you to buy stock during dips, or if retired, have sufficient reserves to preclude selling stocks at market lows.

One positive note: Manufacturing in America has been coming back even before Donald Trump decided to “make America great again.” Overseas manufacturers are seeing rising costs in previously cheap labor markets. America’s rule of law and political stability is attractive and potential tax reform will be a plus, in addition to lower shipping costs. The U.S. is a safe haven in a turbulent world.

As to the stock market, ITR Economics in mid-December opined that “the rate-of-change signature (upside market momentum) post-election, improved corporate profitability, and non-financial leading indicators heading higher. This suggests that positive market trends could continue for awhile. There is a risk that the market could become overvalued but at year-end the S&P 500 price/ earnings ratio suggests that the market is not yet overvalued and not yet treading on thin ice.”

The strong U.S. dollar poses risks. Some sectors of manufacturing and sales heavily dependent on exports or foreign earnings will be constrained. Oil prices could rise somewhat but moves to make America energy independent is attractive to many industries. A strong dollar does help to hold down inflation, which has been trending upward.

Rising interest rates will help savers, but interest rates across the board will remain will below long-term averages despite the potential for up to three quarter-point jumps in the Fed Funds rate.

In late December, pollsters at Rasmussen reported the highest level of optimism since the start of 2015, a growing sense of confidence among Americans. The post-election bounce showed up in Rasmussen’s Consumer Spending Monitor.

But the pollsters added,  “Time will tell if a real change in attitude is here at last or this is just a temporary period of post-election holiday season cheer.” We need strong consumer spending support to offset any hit to trade given the strong dollar.

Tutterow sees economic growth as staying positive in 2017, but if the rate of expansion does not match optimistic hopes in the short run, some stock analysts may be disappointed. Tutterow expects job expansion to be positive in 2017, boosting consumer confidence.

Investors should not chase short-term market movements but pursue a strategy based on individual risk profiles, a policy that defines what your money must do to power your life and peace of mind, and diversification.

This article was written by Larry Light from Forbes and was legally licensed by AdvisorStream through the NewsCred publisher network.

Important Disclosure Information

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dechtman Wealth Management, LLC [“DWM”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from DWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. DWM is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the DWM’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at

Please Note: DWM does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DWM’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please Remember: If you are a DWM client, please contact DWM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.

Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Join our newsletter

"*" indicates required fields

This field is for validation purposes and should be left unchanged.