It’s official! We’re in bear market territory with the S&P 500. And just in case you didn’t know, we’ve also been in bear market territory with the NASDAQ for some time. In my opinion, there’s a good chance that we will experience more pain in the days ahead because of the Fed raising interest rates to fight off inflation. That rate hike is hurting corporate profits, the individual, and the ability for consumer discretionary spending. Why? Because the everyday things that people spend money on are going up rapidly in price. The Fed is fighting a double-edged sword, and they have no choice but to kill inflation. By doing that, they may send the country into a recession. The big question people are wondering now is, what do I do? How do I get through this challenging period?

During these difficult financial times, if there’s one shred of advice I would like you to remember, it’s this. If anyone is saying they have a product or tool that will work in all situations to fix your financial problems, turn around and run the other way. During times like this, it’s imperative to be careful about fear-driven products because they are always on the rise. You may hear financial salespeople recommend a perfect product that will protect you. The truth is there’s not an ideal one-size-fits-all product out there. There is never a silver bullet.

Another piece of advice is to take a deep look at your financial plan and your financial life. Look at your specific situation, analyze it, and discover if your plan will hold up under various economic conditions it may go through or if adjustments are necessary. For example, if you went through the dot-com bubble and wanted to see if your current plan could hold up under similar circumstances, we can help you! Osiwala Financial Group has software that my Advisors can enter your current plan, allocations, lifestyle, and projection timeline. Then we can enter a historical period like the dot-com bubble or the Great Recession and see how your current financial plan will fare. How would having that insight feel? I hope it will help give you some direction on what you need to do at this point. Then you aren’t left with a plan of hope and just riding out the stock market.

Wall Street has a habit of telling people to simply ride these difficult times out, and everything will be OK. The problem is that it doesn’t feel good when you’re going through it. It’s vital to stress-test your plan today. If you want to put your current financial plan through a stress test to know if it will withstand certain economic situations like a recession, click HERE to contact my Advisors at Osiwala Financial Group. There’s no cost and no obligation.

The dot-com bubble is just an example of one historically difficult economic period our country went through, but there are some differences today from the “original .”When we initially hit the dot-com bubble, we were in what I refer to as a “normal monetary policy environment.” In that typical policy monetary policy environment, when the stock market started to decline, and the economy started to slow, the Fed was able to lower interest rates. That allowed bonds to increase in value and be a stabilizer. Currently, the Fed is fighting inflation that we haven’t seen in four decades. But as they try to battle inflation, they’re slowing the economy in a period where things are rapidly going up in cost. We could see a period where the bond market goes into a bear market for the first time in over 40 years while the stock market is in a bear market. During this volatile time, it’s essential to step back and think outside the box a little bit.

In my opinion, this is not a time to assume that if the market is down for a few days, they’ll respond immediately by going back up. I believe that as the Fed normalizes interest rates and monetary policy, we’ll continue to see volatility and pain. The good news is that you can protect yourself and get through it with a solid, comprehensive financial plan.

If you don’t have a plan or your current Financial Advisor has not stress-tested your plan, how do you know your plan will hold up in the storms we may go through in the next few years? If you’re getting to retire, will your plan allow you to still do that if a recession occurs? Click HERE to schedule a complimentary consultation and request a financial stress test to get the clarity you need. If adjustments are required, your OFG Advisor will talk to you about what those changes could be and why they are necessary. Likewise, they’ll tell you you’re in good shape if you’re in good condition. You’ll have the choice to go through this process in-office or over the phone. It’s up to you.