• Shaun O'Keefe I Financial Adviser

Bear markets are for building

Updated: Aug 7

I'm not immune to getting disappointed. But when things continue to not go the way I want, then I begin to get frustrated.

Frustration brings a certain energy with it. We can use it to throw a tantrum and blame this or that, or we can use it drive us forward and create new options for our lives. Let's look at how some people have been using their energy to build now for the good times later.

But first, we'll take a quick look at how we got to this place right now.

Enter 'The Bear'

The last couple of years have seen tremendous health, economic and social challenges across the world. I can list them all - but we probably know them well enough already. And I'm honestly tired of reading and hearing the long list of troubles the world has seen and continues to experience. But here's just one to help provide an outlet for your frustration and energise you to action.

A bear market.

A bear market occurs when prices in a market decline by more than 20%, often combined with negative investor sentiment and a general decline in economic confidence. A bear market is a season that can last for a few weeks or a few years - and it's usually not a fun time for family finances.

There's a saying with investing in the share market:

The bull goes up the stairs, but the bear jumps out the window.

It means that the share market rises slow (bull) but it falls quickly (bear). The speed of this usually catches people by surprise - even when the signs have been indicating a market drop for a while beforehand. People lose money on speculative investments, their asset values drop and they genuinely feel poorer. It can be quite a shock, and recovery can take longer than they would like.

How did we get here?

Markets pumped for the last couple of years under the all the new money created, spent and invested throughout the covid period. It was an uncertain time at the start, and share markets around the world suffered a big drop as a result. But the confidence of the people soon returned, supported by huge spending by most governments. In Australia, this spending seemed to create an air of general prosperity - especially as our country has natural resources that other countries need and want even during this period. People were also confident because they felt the government was looking after them with Job Keeper & Job Seeker, house prices were going through the roof and the share market was booming again. We went from global crisis mode to spending and speculating mode in a very short time.

Then negative news started flowing in. And people got shaky, quickly.

Too much of a good thing tipped us over the edge. The cost of living was going up, and the threat of interest rate rises was looming and people were starting to become less confident. This triggered a bit of a downer in the markets - enter The Bear. Now there's threats of recession which sets the scene for job losses and ...blah blah blah. You get the idea.

A lot of people, including myself, have been frustrated by this situation since the start of the year. But instead of whinging and whining (yeah, I've done a little of that at times too) - they've been using their energy to do something about it.

Bear markets are for building

I really like what this says about bear markets - even when things look bad today, it's proactive and hopeful for a better tomorrow. It leans toward taking action rather than just taking cover. It redirects frustration into energy to create something new.

What are you building?

This is a moment in time to build your future and put yourself and your family on a path of success. Just getting frustrated is a waste of your energy. I know many people who are taking action to enhance the quality of their life financially, relationally, physically and mentally. They're using a sense of frustration to energise their activities. They're building 'assets' in a bear market which will become a solid base to help propel them quicker when the next bull market comes along.

Here's a few themes I've seen coming through:

  • Side hustle: People are keeping their day jobs and building additional income through a debt-free side business. They find a niche and they work out how they can genuinely serve people within this niche. Sure, it's not easy and it requires a certain level of personal sacrifice - but it's virtually risk free and generally low-cost.

  • New business start-up: They've quit their job altogether and stepping into full blown entrepreneurship. The US has seen the 'Great Resignation' where people have chosen not to return to their pre-covid job but are instead starting that business they've wanted to do for a while but never had the courage. Circumstances propelled them and they used their time well to think, plan and finance their exit. It's a bit riskier - but it's also rewarding, and this is what attracts them.

  • A focus on relationships, health & wellbeing: People are taking stock of their life, their families and relationships and they're discovering the simple joy of loving and serving - and they feel great. All the really important stuff. On top of that they're getting fit, building muscle and strengthening their physical bodies. They know that if their relationships and their health are not in order, then things crumble.

  • Resilience: People are building their mental muscles and gaining a new strength for life. With a focus on discipline and consistency they are proactively planning for success in all areas of their lives. They have a positive mental attitude and hard times don't knock them around like they used to. Resilience is powerful.

Bear markets are for building. If we can just use them to direct our energy, to create and build new things, then we're not going to fear them when they come. We'll look at them as opportunities. And so here we are today, in the midst of a bear market with who knows how long until it starts pushing upward like a bull again. So what are you going to build?


Shaun O'Keefe is a fee-based financial adviser helping families build good attitudes about life and money so they can make better financial decisions. He's found that he can help more people, more effectively when he helps families.

The information contained in this article is general in nature only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision concerning a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.


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