How to Protect Retirement Assets in a Bear Market

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The stock market is not yet officially in a bear market, but certain segments certainly are. What causes bear markets and how do they affect older investors who are saving for retirement or who are already retired?

A bear market is, by definition, a 20% decline from the most recent market high. Currently, the Standard & Poor’s 500 stock index, the benchmark that measures the performance of 500 of the largest US stocks, is down about 17% from its peak on Jan. 3, 2022. In stock parlance , it is a “correction”, ie a decrease of 10 to 20%.

According to brokerage firm Charles Schwab & Co., corrections are relatively common. The S&P 500 has fallen at least 10% in 10 of the past 20 years, with an average pullback of 15%. And in two more years, the decline was just under 10%.

The carnage within some Nasdaq 100 stocks has been, well, grizzly. Shares of Netflix, for example, have plunged 75% from their peak on November 17, 2021. Online payment company PayPal is down 74% from their peak; Drugmaker Moderna is down 73% from its peak.

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