Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Money mistakes in a Bull Market versus a Bear Market can make the difference in the lifestyle you have in retirement. They each require their own strategies to make the most of your money. Do you know what they are? Joe Anderson, CFP®, and Big Al Clopine, CPA help you learn from the past, and make the most of your financial future, by using tools and strategies to grow your wealth despite the market ups and downs – and they’ll help you avoid making critical mistakes when the bear rears his ugly head.

Download the Bear Market Survival Guide

Bear Market Money Mistakes

  • Not Understanding the Market
  • Ditching Your Investment Plan
  • Using Up Emergency Savings on Debt
  • Not Using Long-Term Planning

Important Points:

00:00 – Intro

01:01 – Overview

01:53 – Bear Market Money Mistakes

03:44 – Understand the Market: Historical Bear vs. Bull Market

06:00 – Lost Decade Bear Market: S&P 500 Performance

07:38 – Bear Market Survival Guide

09:22 – Timing the Market

11:03 – Ditching your Plan

14:40 – Emergency Fund

15:38 – Bear Market Survival Guide

16:32 – Rebalancing

19:24 – Diversification

20:02 – Tax Loss Harvesting

21:21 – Ask the Experts

22:23 – Pure Takeaway

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Joe: Hey, we’re talking bears and bulls today. Both of them have opportunities, but some of them could absolutely blow up your retirement if you don’t know the right strategies. Stick around, folks, so you don’t get bitten by that bear. Joe Anderson here, CERTIFIED FINANCIAL PLANNER™, president of Pure Financial advisors. And welcome to another episode of Your Money, Your Wealth®, of course, with the big man. Alan Clopine is right there. We’re gonna break down bulls and bears today, because if you look, what is a bear market? A bear market is, we have a decline of 20% or more. But what happens to us when we see the big bear? We get freaked out, we get scared, we run away. What happens when we see the bull? We get excited, right. We get over-confident for some reason. So, each of these different types of markets has their own strategies. That’s today’s financial focus. [growls] let’s get into some statistics. 1928 to 2018. Did you know that we’ve had 25 bear markets. 25! That’s quite a bit. But what do we think about when we see a bear market? It’s like, “oh, is that recession hitting?” well, 14 out of 25 is when a recession preceded a bear market. But what do you do? If a recession’s going to come, there are strategies that can still put you in a better situation. Let’s bring in the big man to figure it out.

Al: So, we do get afraid when it’s a bear market, and we make mistakes. What kind of mistakes are we making? Well, first of all, not understanding the markets, not understanding that bear markets are normal. They’re not abnormal. They’re completely normal. Just have to make sure you have the right strategy during a bear market. That’s first. Second one is, we tend to ditch our investment plans. We get freaked out. We want to get out of the market. We want to go into cash. Usually the worst idea possible, so we’ll get into that a little bit. Then using our emergency savings for paying off debt. Go on vacations, you know, whatever. Funding our retirement accounts before the recession or bear market hits, that’s what that money is for. It’s for an emergency. Don’t use it for anything else other than emergency. And then, finally, not using long-term planning. In other words, you have to have a plan for both markets, bear and bull. And I’ll give you a little teaser. The plan is somewhat similar. As long as you have the right plan, you keep doing the same thing over and over again. And, Joe, I think that’s what a lot of people don’t realize is you don’t completely change the strategy. You just change a couple things about what you’re buying and selling.

Joe: Right. Well, I think people are twice as fearful to lose a dollar than they are to gain.

Al: Sure.

Joe: Right. And so, when that fear sets in, that’s when you might ditch your investment plan, right, or think of something else. It’s like, “oh, well, these stocks are not that great. Let’s get into these because this is the economic environment that we’re in.” let’s go back to kind of our history table here. 1928 now, to 2022, we had 26 bear markets and we had 27 bull markets. It’s split right in half. But what do we think about, right? We’re twice as fearful here and then we get overconfident here. Why? Because a bull market lasts a lot longer than a bear.

Al: And when you look at the stats, Joe, the average bear market is 446 days, so a little bit more than a year. The average bull market is over 2,000 days. So, that’s like 5 or 6 years compared to maybe a little bit more than a year on a bear market.

Joe: When you’re in the mix of this 446 days, that’s an average bear market. And, again, a bear market is a 20% decline or more in the overall markets. But when you’re in the thick of this, it’s like, “oh, my gosh, it’s never going to get better. It’s never gonna get better.” so, then, that’s when we start making decisions that are probably not best for your overall investment strategy. But we like it here. Very interesting. Let’s go back to 1970. Each bear and bull market. 1970–that lasted 543 days. That’s a long 500 days, right? But then, all of a sudden, it recovers, and when you get out, then you’re missing, like, huge bull markets here. And look at the rates of return that we’re exceeding, right? 200%, almost, 600%. 5,000 days. But then, this is the biggest bear market we’ve seen since the great depression. And what was that? 2000-2010. Right, the dotcom bust, 9/11, and everything else in between. This was an absolutely horrible time, but then all of a sudden, it recovers, but we probably change our strategy each way here, al, and I think that’s a big mistake.

Al: Well, we do, and, Joe, we hear this all the time from people is, “I got out before the recession. I got out before the bear market.” and maybe you did. Maybe you figured something out. Awesome. But that’s only one decision you have to make. The second decision is when to get back in. And we have seen countless times where people got out sometime during the great recession and never got back in. Just to give you a little frame of reference, the Dow Jones was about 12,000 before the great recession. That would have been 2007-2008. It went down to 6,000. Yeah, it went down by half. Now we’re above 30,000, and the people that never got back in, Joe, they’re very, very sorry.

Joe: Right. If you go back to 2001 through 2010, we called this, the lost decade. Right? If you own the S&P 500, over that 10-year period, you were down almost 10%, right? You started with $1 million. 10 years later, you got $900,000. Usually you double your money in 10 years or less than that. In this case, right, not good. Down almost 10. But if you had a globally diversified portfolio, right, during that same time period, the s&p was down, but international markets were up 27%. Large cap value. Value stocks were up almost 50%. The bond market was up 81 and so on. Look at emerging markets were up 400%, right. So, if we’re putting all of our eggs in one basket, right– we’ve all heard of that before. You don’t do it! And this is why. This is a really good representation of diversification in one of the worst bear markets in the history of our markets, right. You got to go back to the great depression. But if I was diversified, I was really happy with my portfolio.

Al: Yeah, and I think that’s such an important point, Joe, because people that lived that decade, as we all did, many thought that you just couldn’t make an investment, you couldn’t make money, and that was not true at all. There were several asset classes that did quite well, which really is why we advocate globally diversification. You never know which asset class is gonna outperform. You have a little bit of each. You have the right percentages for your own risk tolerance and goals and needs and rate of return, then you do fine in both kinds of markets.

Joe: Yeah, we don’t know what’s gonna happen in the future, right. We can always look at the past and look like we’re geniuses, right. So, who knows? This doesn’t indicate anything what’s going to happen in the future, but if I can take what happened in the past and apply it to my situation, the odds of me being successful are a lot higher versus guessing, right. Instead of, like, “hey, is this gonna go well, or is that gonna go well? Or I think this is gonna go well.” guess what. A lot of that is already priced in the overall markets and you are probably way too late to that party. Hey, do you want to survive the bear market? Well, get our “bear market survival guide.” go to yourmoneyyourwealth.com. Click on that special offer this week. It’s our “bear market survival guide.” your moneyyourwealth.com. Click on the special offer. That’s our gift to you. Got to take a break. We’ll be right back.

Pash: So Pure Financial was very successful in San Diego, so Orange County was a natural progression for us. Chen: Here at Brea, I work with a really great team. I think that clients who live locally are really appreciative and excited that there’s a local office. Stokes: We moved straight up the coast and opened an office in Los Angeles. You know, we have a tremendous amount of people that want to work with a firm like ours where, you know, we’re truly partnering with them. Fuss: Markets go up and down, but we’ve got some big powerhouses here in Seattle, and they’re creating a new economy. We really want to be here for those employees to help them achieve their long-term retirement goals. Huband: We definitely take a collaborative approach to managing our client relationships, and the financial planning that we do involves teamwork. There’s never just one set of eyes looking at a situation. We lean on each other for each other’s expertise. Greenberg: Our goal is to just identify areas that we could add value and so that when they leave our office their lives our better financially than they were when they came in.

Joe: Hey, welcome back to the show. The show is called Your Money, Your Wealth®. Joe Anderson, Big Al Clopine. We’re trying to survive the bear. [growls] the bear comes out at you, what are you supposed to do? You’re not supposed to run. Right? Because then they’re just gonna chase you, eat you up. I think you’re supposed to, like, stand up and be strong and be tall. That is what strategy is all about. Don’t freak out, don’t change your discipline. Don’t change your strategy. Go with the flow here and survive it. Go to our website yourmoneyyourwealth.com. Click on that survival guide, the “bear market survival guide.” that’s that special offer this week. Let’s go to the true-false.

Al: “During a bear market, it is best to go to cash until the dust settles.” true or false? Well, that’s false. In fact, that’s the worst time to go into cash because stock prices are low. But, Joe, why don’t you explain?

Joe: Right. All right, so, let’s say you’re investing $2,000 annually, and you stayed in cash, right. You don’t know when the bear is going to go back in the woods. And I’m just gonna continue to play on, you know, the bear and the bull all day here. But if I stayed in cash, right– you invest $2,000 a year for the next 20 years, and you’re, like, “hey, I don’t know” because you don’t really know when to get in or out, like al said earlier. You got 44,000. Let’s say you absolutely timed it awful. Right? You kept going in and it kept going down and then everything else. You were the worst timer! You got 121,000. So, bad timing is better than nothing. Right? Let’s say you were dollar cost averaging. This is a way that you can just slowly get into the overall markets. Well, you did a little bit better than really bad timing. How about if you stood up to the bear and just invested 135,000 and if you had the absolute crystal ball, you want to add 151,000. So, yeah, the crystal ball is gonna pay you a little bit more, but who has a crystal ball? Most of ours are very, very cloudy. So the–i guess the rule or the lesson is that, you know, you could be a really bad timer. You could do something strategic, or you could just invest immediately is a heck of a lot better than just staying in cash.

Al: Yeah, no question, Joe. And, again, that’s everyone’s tendency is to get out of stocks when the market is going down because they can’t afford the loss. Well, if you change your mentality–i mean, if you think about rebalancing, rebalancing allows you to purchase–to buy stocks while they’re low. That’s what you want to do. Right? You buy stocks while they’re low and enjoy that increase. So, don’t go to cash ’cause that’s not a good plan, but you should have already have a plan before. And, Joe, it’s interesting, 2 out of 3 people think that the economy is gonna get worse over the next year. We don’t know.

Joe: So, 2 out of 3 people are, like, “man, it’s gonna get really bad.” I talk to people all the time, and it’s, like, every year, they say it’s the worst. So, it’s never good. So, I don’t know what side of the fence you sit on here, but what’s your strategy? What do you do if you still think that things are gonna get worse? Do you stay in cash and then you wait until things get better? By that time, maybe the market’s already reacted. Here’s another data-mining, cherry-picking example for keeping you in your seats. $10,000, 1986 to 2020. Ok? 10 grand. You just fully invest. S&P 500. Let it go. Don’t do anything. Right? Fall asleep. Rumpelstiltskin. You wake up 20 years later. You got 150 grand! How about if you think, “oh, man, things are bad, I’m gonna get out, I’m gonna get in”? Out of these 20 years, you missed just the 10 best days in the market. You lose $100,000 of market value, because when things go bad, guess what happens, like, the next day, right. It shoots right back up, and you’re like, “oh, I missed it.” then it goes back down. You’re, like, “I’m gonna get in now.” and then it keeps going down, then you get out, then it shoots back up. Right? It’s a terrible game to play. If I miss the 30 best days… I got 15 grand. If I miss the 60 best days from 1986 to 2020, 3 grand. Right? Stay invested, I guess, is the lesson here, Big Al.

Al: It is the lesson because, I mean, so here’s another thing that we hear is, “well, it’s different now. It’s different. We’ve never had these issues before. We should not invest in the market.” we’ve been–I’ve heard that my entire life, and I think if you think about it, you have, too. I mean, you can go back to the oil embargo in the eighties. That’s when I started my career. You can point to all kinds of things–World War II– all kinds of stuff. Yes, the problems are different, but it doesn’t change the concept that markets go up and tend to go up over the long term. Also, realize that the best days happen in the worst markets. So, if you get out of the market right now, you’re gonna miss those best days and, Joe, have that kind of subpar rate of return.

Joe: Let’s say you get $100,000–a nice inheritance or nice, big fat bonus, whatever it is, and you’re looking at, “should I get in the market now? I’m too afraid. I’m gonna sit in cash.” well, here’s another strategy. It’s called dollar cost averaging. Right? This can reduce your risk. Right? And it can also reduce the noise in your head because it’s not all invested. Because a lot of us, right, we get this lump sum and you invest it and what happens in the market the next day or the next week or the next month? It goes down, and you’re like, “Aggh! Man, I knew I shouldn’t have done that.” well, this will reduce your overall risk because you’re slowly getting into the overall market, right, so you can spread that out. 100,000. Maybe it’s $10,000 a month, 10,000 a week, whatever it is. So, you’re slowly kind of chopping up that market. And as the market starts zigging and zagging, you’re buying shares at different prices and you can kind of even that share price out.

Al: Yeah, and I think all of these things are potential benefits, but the truth is– what I would say the best benefit is, you stop thinking about it, right. Because that’s exactly what you’ll do. You invest, and the market will go down. You’ll think you made a bad decision. And then you’ll probably get out of the market and say, “the market doesn’t work for me.” if that’s you, dollar cost averaging is just fine. But remember, the market goes up more than it goes down. Dollar cost averaging tends to not work as well as an initial investment, although from the slide before, it’s actually pretty close.

Joe: Now, here’s another issue that we all have when we see bear markets. It’s like, “oh, I have debt. Maybe I just pay off all my debt, and I’m just gonna hibernate.” right? “wait until the sun comes out again, and at least I know I have a roof over my head.” be careful with that strategy, too, because a lot of times people use their emergency cash and savings just to kind of wipe out all their debt. Is that part of the overall strategy? Yes, being debt-free is fantastic, but if that wasn’t a part of your original plan, be careful because you probably still want to have some cash reserves just in case unfortunate things happen with your job or, you know, your income.

Al: Well, I think that’s right, and I think that’s a tendency is to try to pay off your debt in bad times. And I’m not saying that’s not a bad idea. It’s just that don’t use your emergency cash. It’s for times that are tough. Maybe you lose your job, right. Maybe you’re in sales and your income is way down. That’s what your emergency fund is for, a medical emergency. It’s not for paying down debt. So, just be careful there.

Joe: Yeah, it’s like, you’re paying down your fear when you do that. It’s like, “oh, does that make me feel better.” so liquidity is key. Right? Cash, CDs, saving bonds, make sure that you have that liquidity in that bear market. Hey, you want to survive this, don’t you? Go to our website yourmoneyyourwealth.com. Click on that special offer. It’s our survival guide for the bear market. You got to protect yourself. We got bear spray in there and everything. Go to our website yourmoneyyourwealth.com. Click on that special offer. Its the “bear market survival guide.” gonna take another break. The show is called Your Money, Your Wealth®.”

Joe: Welcome back to the show. The show is called Your Money, Your Wealth®.” Joe Anderson here, CERTIFIED FINANCIAL PLANNER™ with Big Al Clopine. He’s a cpa. We’re trying to battle the bear. [growls] go to our website, yourmoneyyourwealth.com. Click on that survival guide, the “bear market survival guide. Let’s see how you did on that true-false question.

Al: “The main reason to rebalance your investments accounts is to make more money.” true or false? It’s actually false. The main reason that you rebalance is to reduce risk. And this is over a 50-year period. It’s a diversified portfolio. Standard deviations are a measure of risk, and this will show you. By not rebalancing, you end up with a riskier portfolio. “riskier portfolio” means it’s more volatile. It’s gonna be harder to get through the peaks and valleys. So, with rebalancing, you do have a better ride. In this particular case, the last 50 years, you did a little bit better on the annualized return, but that’s not the main reason you do it. And by the way, rebalancing just simply means when you have a certain asset class and it gets too high or too low– if it’s too high, you sell a little bit to get back to what it should be. If it’s too low, you buy a little bit to get back to where it should be. Forces you to sell a little bit high and buy a little bit low.

Joe: Yeah, it’s really hard to do. It’s counterintuitive, because if you have a 60/40 portfolio–60% stocks, 40% bonds–and the stocks are doing well, and all of a sudden, you have 70% stocks and 30% bonds. You’re like, “wow, this is great.” the last thing you want to do is sell your stocks because they’re doing fine. Right? But you have to sell them to reduce that risk. That’s why you’re creating more risk when your good investments do really good. Right? It’s like, “no, I don’t want to sell those.” but yeah, you have to sell them because at some point, they’re gonna go down and you have too much exposure in that particular asset class. So, it will measure your risk. It will reduce that risk. In a lot of cases, it’s going to increase your return, because then you’re buying asset classes that are down. When do we want to buy stocks or any investment? When it’s low. And we want to sell high. But who does that? Almost no one if they don’t have a disciplined strategy. We do the opposite. Right? We buy high, and then we sell low. Switch your mentality, and you’re going to reduce your risk and increase your overall return. Pretty good outcome there.

Al: Yeah. So, let’s now talk about strategies in a bear market. What do you do? Well, we’ve already talked about rebalancing. That’s key. Right? So, rebalancing means your stocks have gone down, so buy some more stocks to get to your right allocation. It’s forcing you to buy low. So that’s number one. Number two is to diversify. If you’re not already diversified, make a plan, have a plan, have a financial plan, have a retirement plan so you know what you should be doing. Diversification is great because different asset classes perform well at different times. So you want to have a little bit of everything. And then, finally, tax-loss harvesting. When stocks go down and it’s not in a retirement account, Joe, you have an opportunity to create some tax alpha.

Joe: Yeah, I mean, if you take a look at a diversified portfolio versus maybe just the S&P 500, you’re getting almost the same return with a lot less risk. Right? Because if you got all your eggs in one basket, that’s necessarily not the best. But the average investor does something minuscule. They do 3%. Right? And this is from a 2001 to 2020. And why do they do 3% when the market does 7.5% is because you’re buying and selling at the wrong time. Again, you’re selling when, “uh-oh! Whoa!” and then when things get better, that’s when we’re buying. You gotta do the opposite. That’s why the average investor does not necessarily get market returns, something subpar than that. But then you got to look at the taxes because in a volatile market, the tax strategy could be a really good opportunity for you.

Al: Well, it is, Joe. So, let’s talk about tax loss harvesting. So, this is what you can do right now. And it can be pretty helpful to save taxes. So, you buy a stock, right, or you buy a mutual fund, you buy an index fund. Doesn’t really matter what you bought. So, you bought it, it was $10,000. Ok. Good start, right? But then it goes down to 5,000. So you have an opportunity when it’s not a retirement account. When it’s in a retirement account, this doesn’t apply. But if it’s outside of your retirement account, you’ve got an investment worth $5,000. What should you do? Really, what you should do is sell it. “well, I don’t want to sell it.” well, you do want to sell it, because you want to create a $5,000 tax loss. But you don’t want to get out of the market. You want to buy something similar. The IRS says that you cannot buy the same stock or mutual fund within 30 days. So, you have to buy something else. Maybe you have a total stock market fund and you buy an S&P fund or vice versa. Right? So, you’re still in the market. And when you’re still in the market, as it increases back to whatever–whoops–it’s like in this case $10,000 or even $15,000. Now, when you want to sell some of those shares for cash flow, the first $5,000 of what you sell will be 100% tax-free because you got that loss.

Joe: Yeah, really good point. And that loss will carry over for the rest of your life. It will carry over if you don’t use it. Right? So, you can bank those losses. So in volatile markets, tax loss harvesting is key. All right, let’s switch gears. Let’s go to ask the experts.

Al: “I’m in my 30s and willing to take some financial risks. Is doing short sales a good strategy in a bear market?” so, short sales is basically betting on the market going down. So you actually buy a position and if it goes down, you make money. If it goes up, you lose money. Joe, I would say that’s often a pretty risky strategy.

Joe: Yeah, you’re lending the position and buying it back when it goes down. Um…so, yeah, I don’t know. There’s long-short funds that people like to get into to kind of hedge. Now you’re getting into… You know, wholly different atmosphere in regards to personal finance, which I would probably bet 99% of us should stay far away from, because you can lose your shirt and your pants with the old short sale game, so…

Al: And even your socks.

Joe: Even your socks, yeah. Maybe you could keep one. Right? So, no, we would decline on that one.

Al: And I would say, Joe, it’s not that you can’t make money doing that.

Joe: Sure.

Al: But it’s for most of us, it’s way too complicated.

Joe: Way too sophisticated.

Al: There’s a lot of risk because you can lose a lot of money.

Joe: So, what’s the pure takeaway? What did we learn? Things to avoid. You know, not really understanding how markets work, and then that’s when we want to ditch the strategy and we want to find something sexy. All right, someone’s always selling something, right? “oh, buy on the dip.” “should I short sale here?” “should I do…” be careful with those types of strategies, you know, because your solid investment plan is probably the best plan as long as it’s well thought out, that it’s geared toward your overall goals. You know, and making sure that you have cash on hand because when things get into a bear market, recessions tend to follow that. And then if that happens, some people potentially lose their job for a little bit and you want to make sure that you have enough cash there. But first and foremost, do not abandon your long-term strategy. Hey, you want the survival guide, go to yourmoneyourwealth.com. I’m telling you, there’s not gonna be any thrills or whistles of short selling and buying on the dips, but if you want to survive a bear market, go to our website yourmoneyyourwealth.com. Click on that special offer. It’s gonna give you the tools and the tips that you need to make sure you accomplish your goals. That’s it for us today. Hopefully you enjoyed the show. For Big Al Clopine, I’m Joe Anderson. We’ll see you next time.


• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

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• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience, and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.

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CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.