A bear market is when stocks takes a hit over a prolonged period of time. Hence today’s picture as I like any excuse to feature a member of the Ursa family. This is an Inuit carving that I saw displayed at Oceanopolis in Brest, France’s largest aquarium. Even though we’re not in bear territory quite yet my shares have taken a tumble in recent times. It’s perhaps due to the antics of that very troubled and damaged man in Russia. My prayers are with him and, of course, with everyone whose lives he is adversely affecting. That will be all of us then but some poor souls have obviously taken the brunt of it. A little bit of a temporary financial hit is nothing in the scheme of things. But it begs a question. Are shares too risky?
I’ve written about my share investments in the past. The capacity of the market to go up and down puts the heebie jeebies up some people including my friends. ‘I don’t know how you can do it.’ was the gist of a couple of conversations I’ve had of late with people who prefer less risky options. They were both in the process of investing in premium bonds in the hope of improving on woefully poor interest rates without risking their capital. Fingers crossed that Ernie comes up trumps for them.
So how do I risk losing my shirt? Well the main thing is seeing my investments largely as a long term strategy. Sure I sometimes capitalise on quick wins but in the main I’d expect to keep a share for a few years and ride out stock market peaks blips. I’ve said before that I spread my money over a range of sectors. I also use something called ‘pound cost averaging‘ to smooth out the risks. Instead of investing large chunks of money at once I’ll spread my purchases over the year. But I’m also careful not to chase losses. If I’ve bought something that experiences a cheap fall I don’t invest a bit more in that company. I think that’s how that big bank Barings collapsed.
At a deeper level I see money as energy. It comes and goes and is a tool that helps me influence the life of myself and others. Rises and falls in the stock market of a few hundred pounds parallel peaks and troughs in other aspects of my life. I’m philosophical. Profits are a blessing. The downs are a learning too. I’ve got through them in the past but hey! If I don’t in the future they’ll present another learning challenge.