This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Meta Platforms (NASDAQ: FB) stock went up more than 17% on Thursday, then Amazon (NASDAQ: AMZN) stock was down over 12% in after-hours trading.

When such large companies make mega moves to the upside and downside, it can be a sign that the market is volatile. And given the NASDAQ Composite Index (NASDAQ: .IXIC) has plunged into a bear market in a matter of months, it is clear that the 2022 stock market is looking much different than the rip-roaring year we had in 2021. A bear market is defined as a drawdown of at least 20% from an all-time high, while a correction, which the S&P 500 Index (SP: .INX) is currently in, is a drawdown of at least 10% from an all-time high.

However, bear markets are not inherently bad things. And with the right temperament and patience, they can even lead to life-changing wealth. Here are three timeless investing lessons from the 2022 Nasdaq bear market that you can take with you to become a better investor.

1. It’s a staircase up and an elevator down

There’s an old saying that the stock market is a staircase up and an elevator down. We are seeing this pattern play out before our very eyes.

Bull markets are typically slow and steady and last for multiple years, while bear marks are sharp and swift and tend to last for just one or a few years. At least that’s what history tells us. And that’s certainly what has played out since the financial crisis. There has been a more or less uninterrupted 12-year bull market since the financial crisis. But included in that bull market have been a handful of bear markets — such as the fall 2018 bear market, the spring 2020 bear market, and the bear market we are currently in.

Yet through it all, the S&P 500 has still produced a 375% return (without factoring in dividends) since 1 January 2009, while the NASDAQ Composite has produced a more than 700% return (without factoring in dividends).

^SPX data by YCharts

The median annual gain of the S&P 500 between 1950 and 2021 was 12.36%. But the standard deviation for that period was 16.04 percentage points. That means that roughly one out of every three years produces an annual return of worse than -5.91% or greater than 26.17%.

It’s also worth mentioning that there have been 18 down years and 53 up years since 1950. But the average return during a down year is -11.4%. However, that data is somewhat misleading given the unlikelihood that bear markets correlate with calendar years. For example, in 2018 the S&P 500 was up close to 10% year-to-date (YTD) in early October 2018, fell to -12% YTD by Christmas Eve (a 22-percentage-point swing in less than three months), but then finished the year down just 6%.

2. Valuations matter

Probably one of the most contentious debates in investing is on valuation. On one end of the spectrum, you have investors like Warren Buffett, who preach value investing and only pay reasonable amounts for businesses based on their earnings, free cash flow, etc. Then on the other end, you have investors like Cathie Wood, who argue that innovative companies that change the paradigms of their industries have so much upside that valuation should be an afterthought.

The 2022 bear market has taught us that while companies may have tons of potential, there is a great deal of uncertainty as to whether they can live up to lofty expectations. Uncertainty can come in the form of unreliable management, as we have seen through the spectacular collapse of Teladoc Health stock, which is down over 90% from its all-time high. It can also come in the form of increased competition, which we have seen in the fintech space as legacy financial services companies open their pocketbooks on investments, which has strained the edge that companies like Robinhood, SoFi, and Upstart were thought to have in spades.

The best approach for most investors is to find a middle ground between value and growth by using as many known variables as possible and avoiding unknown ones. In this vein, that probably means sticking mostly with established companies with positive free cash flow and growth potential. These are the types of companies you’ll want in your corner if the market crashes.

3. Invest in companies that you understand and that suit your personal risk tolerance

The biggest mistake an investor can make isn’t selling too soon or buying something too high. It’s investing in companies that you don’t understand and that don’t suit your personal risk tolerance. Because if you do that, then you won’t know why a stock can go up 400% in a year and then fall 90% the next. Or why a stodgy dividend stock can barely move while the market soars and then barely fall when the market tanks.

Aligning your personal risk preferences with companies you understand and believe in is the best way to avoid the psychological torment that can come when a bear market is straining good and bad companies alike, and you don’t know how to react. By sticking with a process, you stand the best chance to endure market volatility and let the power of compound interest work in your favour over the long term.

Embrace lifelong learning

Many investors who are new to the stock market have never endured a multi-year bear market. The bear market of late 2018 only lasted a matter of months. Same with the 2020 bear market. In fact, there has not been a bear market that has lasted for more than a year since 2008. By taking a long-term perspective while also using the bear market as a learning experience, you can use this period of stock market volatility to sharpen your skills and become a better investor. If done correctly, this approach could pay lifelong dividends that far exceed any pain your portfolio is currently suffering.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 timeless investing lessons from the 2022 NASDAQ bear market appeared first on The Motley Fool Australia.

More reading

• Why Alkane, Chalice Mining, PointsBet, and Qantas shares are rising today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month?
• Here’s why the Imugene share price is plunging 15% today
• Leading brokers name 3 ASX shares to buy today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Daniel Foelber has the following options: long January 2024 $100 calls on Teladoc Health, long January 2024 $150 calls on Teladoc Health, short January 2024 $110 calls on Teladoc Health, short January 2024 $170 calls on Teladoc Health, and short July 2022 $7.50 puts on SoFi Technologies, Inc. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Inc., Teladoc Health, and Upstart Holdings, Inc. The Motley Fool Australia has recommended Amazon and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a sizeable decline. In afternoon trade, the benchmark index is down 1.25% to 7,342.7 points.

Four ASX shares that have defied the market selloff today are listed below. Here’s why they are rising:

Alkane Resources Limited (ASX: ALK)

The Alkane share price is up 4% to $1.06. This follows the release of an update on the gold miner’s Roswell Deposit. According to the release, it has been updated after an additional 7,000 metres of drilling and now stands at approximately 904,000 ounces. This is up 37% from its previous estimate.

Chalice Mining Ltd (ASX: CHN)

The Chalice Mining share price is up 2% to $7.09. Investors have been buying this mineral exploration company’s shares following the release of further promising drilling results from the world class Julimar project. Chalice Managing Director and Chief Executive Officer, Alex Dorsch, said: “With each new round of drilling results, the scale, quality and potential upside of this world-class critical minerals system just keeps getting better and better.”

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is up 4% to $3.12. This appears to have been driven by a positive response to the sports betting company’s third quarter update from Goldman Sachs. The broker has retained its buy rating with a $5.78 price target. It notes that PointsBet’s revenue was in line whereas its cash burn/marketing was better-than-expected.

Qantas Airways Ltd (ASX: QAN)

The Qantas share price is up 2.5% to $5.75. The catalyst for this was the release of a trading update by the airline operator. That update revealed that domestic travel numbers are rebounding faster than expected. This is expected to underpin second half underlying EBITDA of $450 million to $550 million, which will be a big improvement on Qantas’ first half EBITDA loss of $245 million.

The post Why Alkane, Chalice Mining, PointsBet, and Qantas shares are rising today appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• Qantas share price lifts off on projected return to profitability
• ‘Clear vote of confidence’: Qantas share price on watch following key updates
• Travel’s back! 3 ASX shares this expert loves right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has a serious case of Mondayitis on the first day of the trading week so far. The index clearly fell out of the wrong side of the bed this morning and is down a nasty 1.25% at just under 7,340 points at the time of writing.

But rather than dwelling on that, let’s delve deeper into the share market today and check out the ASX 200 shares that are currently at the top of the market’s volume charts, according to investing.com.

The 3 most-traded ASX 200 shares by volume this Monday

Telstra Corporation Ltd (ASX: TLS)

Our first ASX 200 share to check out today is blue chip Telstra. This telco has had a notable 11.14 million shares swap hands so far this Monday. There’s been a small announcement out from the company today. Telstra revealed this morning that its new chief financial officer is to be Michael Ackland, who will start in the role on 1 September.

However, it’s more likely that it is the Telstra share price itself that is responsible for this volume we see. Telstra shares have been whacked today, currently down 1.24% at $3.99 each.

Qantas Airways Limited (ASX: QAN)

Another ASX 200 share that used to be a government-owned company is next up today. National air carrier Qantas has seen a hefty 12.6 million of its shares fly to a new home over today’s trading day thus far. In stark contrast to the markets today, Qantas shares have taken off. The company is currently up 2.68% at $5.75 a share.

This move comes after the company reported some pleasing updates this morning, as well as announcing new long-haul flight paths. It’s this outbreak performance that has probably resulted in Qantas’ appearance on this list today.

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara rounds out our list today, coming in at first place. This Monday has seen a sizeable 15.98 million Pilbara shares bought and sold thus far. Unfortunately for investors, this volume seems to be the direct consequence of a dreadful share price drop. The Pilbara share price is currently down by a nasty 6.14% at $2.675 a share.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

More reading

• Why Alkane, Chalice Mining, PointsBet, and Qantas shares are rising today
• Why are ASX tech shares having such a dire run on Monday?
• The Pilbara Minerals share price just dropped 6%. Time to pounce?
• Why is the Pro Medicus share price sinking on Monday?
• What’s the outlook for ASX 200 mining shares in May?

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s nearly reporting time for many of the large S&P/ASX 200 Index (ASX: XJO) bank shares.

Banks that are scheduled to release their half-year results soon include Australia and New Zealand Banking Group Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC).

Commonwealth Bank of Australia (ASX: CBA) is expected to release its FY22 third-quarter numbers while Macquarie Group Ltd (ASX: MQG) is scheduled to announce its full-year report.

According to reporting by The Age, investors are expecting ANZ to report cash net profit after tax (NPAT) of $3 billion. Westpac is expected to show it generated $2.8 billion of net profit. NAB is predicted to generate a net profit of $3.4 billion.

CBA’s quarterly net profit is expected to be $2.1 billion of net profit.

Macquarie is expected to make a full-year profit of around $4.5 billion.

Can the ASX 200 bank shares generate these profits?

In recent times, the banks have been reporting a decline in profitability, with a drop in the net interest margin (NIM).

For example, in the CBA FY22 half-year result, it said that its NIM declined by 17 basis results from the second half of FY21 to 1.92%. CBA said that excluding the impact from increased lower-yielding liquid assets, the bank’s NIM decreased five basis points due to “increased switching to lower margin fixed home loans, the impact of the rising swap rates due to market expectations of higher interest rates and continued pressure from home loan competition”.

The Age reported on commentary from Andrew Martin from Alphinity, who said that rising interest rates would help banks because lending rates would increase faster than the savings interest rate. Martin suggested that investors would want to hear what the impact of rising rates will mean for bank profitability.

However, it may not be that escalating rates turn into bigger profits for the ASX 200 bank shares.

Investors Mutual portfolio manager Michael O’Neill suggests that the competition in the lending sector could continue to weigh on profitability, according to The Age:

It feels like there’s going to be more margin pressure than expected, particularly because of the competition offsetting those funding benefits.

If you’re assuming material earnings growth from the banks, I think you will be somewhat disappointed.

Dividend expectations

The banks that are about to report key results are predicted to pay sizeable dividends.

The Age reported that consensus estimates suggest ANZ is going to pay an interim dividend of 72 cents, that NAB will pay a dividend of 71 cents per share and that Westpac will pay an interim dividend of 59 cents per share.

Macquarie’s final dividend is expected to be $3.69 per share.

ASX 200 bank share valuations

According to Commsec, these are the following forward price/earnings (P/E) ratios for the big ASX 200 bank shares:

The ANZ share price is valued at 13 times FY22’s estimated earnings.

The Westpac share price is valued at 15 times FY22’s estimated earnings.

The NAB share price is valued at 16 times FY22’s estimated earnings.

The CBA share price is valued at 20 times FY22’s estimated earnings.

The Macquarie share price is valued at 18 times FY22’s estimated earnings.

The post Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month? appeared first on The Motley Fool Australia.

More reading

• Own Macquarie shares? Here’s what to watch when the bank reports this week
• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• NAB share price drops amid AUSTRAC update
• Top brokers name 3 ASX shares to sell next week
• Here’s how the NAB share price stacked up in April

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Imugene Limited (ASX: IMU) share price is deep in the red today following a shock announcement from the company.

At the time of writing, the immuno-oncology company’s shares are down 15% to 18.7 cents apiece.

It’s worth noting that Imugene shares have extended their losses to around 23% in the past month.

Imugene terminates supply contract

Investors are selling off Imugene shares after the company advised it has cancelled a supply agreement with MSD. The latter is a tradename of pharmaceutical giant Merck & Co.

While no reason was given for the termination, Imugene is continuing with its clinical trial of HER-Vaxx.

The primary objective of the study is to determine the safety and efficacy of HER-Vaxx in combination with anti-PD-1 therapy.

The immunotherapy will be used for treatment of gastric, breast, ovarian, lung, and pancreatic cancers.

HER-Vaxx is a B-cell immunotherapy that has been shown in studies to “stimulate a potent polyclonal antibody response to HER-2/neu, a well-known and validated cancer target”.

PD1-Vaxx has the advantage that it induces a unique polyclonal immune response that may increase response rates for therapy.

Imugene share price snapshot

Despite today’s fall, the Imugene share price has managed to remain 1.32% in the green over the past 12 months.

However, when looking year to date, its shares are down by 52%.

Imugene shares reached an all-time high of 62.5 cents in November, before shifting to a downhill trend.

Based on today’s price, Imugene has a market capitalisation of roughly $1.12 billion with approximately 5.85 billion shares on issue.

The post Here’s why the Imugene share price is plunging 15% today appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: AMP asset sale talks, Syrah rockets
• ASX 200 healthcare shares were chronically ill last quarter. Take a look

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating and $9.15 price target on this artificial intelligence data services company’s shares. This follows an update out of Meta (Facebook), which revealed an increase in artificial intelligence and machine learning investment. Citi feels this bodes well for Appen given how Facebook is one of the company’s biggest customers. The Appen share price is trading at $6.39 on Monday afternoon.

Coles Group Ltd (ASX: COL)

A note out of Morgans reveals that its analysts have retained their add rating and lifted their price target on this supermarket giant’s shares to $20.65. Morgans highlights that Coles delivered a third quarter sales update slightly ahead of its estimates. It feels this was a big positive given the major disruptions during the period. Overall, the broker continues to see Coles as a good value option with defensive qualities and the capacity to invest in growth opportunities. The Coles share price is fetching $18.52 today.

ResMed Inc (ASX: RMD)

Analysts at Goldman Sachs have retained their buy rating but trimmed their price target on this sleep treatment company’s shares to $33.70. Goldman notes that ResMed’s quarterly update highlighted that supply chain pressures remain acute and the near-term upside from the key competitor recall remains more limited than hoped. Nevertheless, the broker believes ResMed is still in a stronger position today than 12 months ago and does not believe the near term challenges should be overcapitalised. The ResMed share price is trading at $28.63 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why Appen, Aussie Broadband, IGO, and Kogan shares are sinking today
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week
• Analysts name 2 ASX 200 dividend shares to buy next week
• Why Kogan, Reliance, ResMed, and Sandfire shares are dropping

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a bleak start to the week for ASX shares so far this Monday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has lost a meaty 1.33% and is well back below 7,400 points. But ASX tech shares are faring far worse on the whole today.

For starters, the S&P/ASX All Technology Index (ASX: XTX) has plunged past the losses of the broader market, currently down a nasty 3.94%. But, as you might expect, some ASX tech shares are suffering even more. Take Xero Limited (ASX: XRO), down a horrible 5.79% at $90.77 a share. Tyro Payments Ltd (ASX: TYR) has also fallen 5.82%, while WiseTech Global Ltd (ASX: WTC) is down 6.6%. And Pro Medicus Limited (ASX: PME) has lost a painful 6.5%.

So what’s going on with this clear sector-wide move?

Why are ASX tech shares getting sold off?

Well, there’s nothing specific impacting the tech sector today. However, we often see moves like this when there is broad selling pressure in the market. ASX tech shares tend to outperform the market on good days, and underperform on bad days. Today is a prime example of the latter.

Additionally, the US tech sector has been going through some significant volatility of late which is also likely spilling over into our local markets as well. Last week, we saw several of the US the giants report their earnings. And many, such as Amazon.com Inc (NASDAQ: AMZN), disappointed. On Friday night (our time), the tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) fell a shocking 4.47%, led by Amazon’s painful 14.05% drop.

It’s these factors that are the most likely explanation as to why ASX tech shares are getting so hammered today. No doubt investors will be hoping things improve later in the week, but we shall have to wait and see.

The post Why are ASX tech shares having such a dire run on Monday? appeared first on The Motley Fool Australia.

More reading

• The Pilbara Minerals share price just dropped 6%. Time to pounce?
• Why is the Xero share price sinking 6% today?
• Why is the Pro Medicus share price sinking on Monday?
• What’s the outlook for ASX 200 mining shares in May?
• Up 80% in 2022, are Coronado shares heading for the ASX 200?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Pro Medicus Ltd., Tyro Payments, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has recommended Amazon and Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing, the benchmark index is down 1.3% to 7,335.8 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 4% to $6.39. Investors have been selling Appen and other tech shares on Monday following a major selloff on the tech-focused Nasdaq index on Friday night. Not even a positive broker note out of Citi could stop Appen’s shares from sinking today. Its analysts have retained their buy rating and $9.15 price target on the company’s shares.

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price has crashed 24% to $4.20. This follows the release of a trading update which included a number of negatives. The main ones are downgrades to the top end of its earnings and broadband connections guidance for FY 2022. In respect to the former, Aussie Broadband was previously guiding to EBITDA of $27 million to $30 million. Whereas it now expects EBITDA to be $27 million to $28 million.

IGO Ltd (ASX: IGO)

The IGO share price is down almost 6% to $12.42. Investors have been selling this battery materials miner’s shares in response to the release of its quarterly update after the market close on Friday. That update revealed that the commissioning of Train 1 at Kwinana is progressing. However, it has not yet successfully produced battery grade lithium hydroxide. Management advised that the debugging process and understanding of what it needs to do to deliver quality product and consistent operations is being progressed.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down a further 3% to $3.79. This ecommerce company’s shares have been hammered over the last two trading sessions following an abject quarterly update. The team at Credit Suisse responded to its update this morning by downgrading Kogan’s shares to an underperform rating and slashing its price target by almost a third to $3.75.

The post Why Appen, Aussie Broadband, IGO, and Kogan shares are sinking today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Aussie Broadband share price is crashing 25% today
• These are the 10 most shorted ASX shares
• Best ASX shares to buy in May 2022
• Why Kogan, Reliance, ResMed, and Sandfire shares are dropping
• Kogan share price crashes 12% to multi-year low amid Q3 sales decline

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd, Aussie Broadband Limited, and Kogan.com ltd. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

To say that the first four months of 2022 have been turbulent from an investing standpoint would be an understatement. Stocks have been volatile since January and many portfolios are down significantly year to date.

But while it’s never fun to lose in the range of 10% to 15%, some investors are growing increasingly concerned over a fully-fledged, prolonged bear market. That’s when stocks fall 20% or more from a recent high.

Bear markets can be tough to endure and harder to recover from than stock market downturns that are more modest. But if you make these moves, you won’t have to sweat a bear market at all.

1. Make sure your assets are allocated appropriately

It’s one thing to have a portfolio that’s 80% stocks in your 40s or 50s. But it’s another thing to go that heavy on stocks in your mid-60s when retirement might only be a year or two away.

One of the trickiest things about bear markets is that it’s hard to predict how long they’ll last. Our most recent bear market, which happened in early 2020 on the heels of the COVID-19 outbreak, was fairly short-lived. But a bear market could last years.

If you’re nearing retirement, it’s important to keep a substantial portion of your assets outside of the stock market (such as in cash or bonds). But if retirement is decades away, you probably don’t need to make any changes to your asset allocation, even if stocks comprise the bulk of your IRA or 401(k) plan. That’s because you should, in theory, have ample time to recover from a downturn.

2. Shore up your emergency fund

Many people assume they’re doomed to lose money during a bear market. But if you leave your portfolio alone and wait for it to recover, you may not lose so much as a dollar.

That’s why it’s important to have a solid emergency fund — one that can ideally cover up to six months’ worth of essential living costs. That way, you’ll be less likely to land in a situation where you have to liquidate stocks when they’re down to access cash.

3. Stockpile some cash to invest with

Bear markets can be scary for investors, but they can also spell opportunity. Once you’ve beefed up your emergency fund, try setting aside extra cash for investing purposes.

When the stock market tumbles broadly, the value of quality stocks can drop as well. But that gives you a chance to scoop those shares up at a discount. You’ll need cash to make that happen, though, so do your best to free some up.

That said, don’t raid your emergency savings to scrounge up money to invest with. Doing so could lead to that same unwanted scenario of having to lock in losses should a need for money arise at a bad time.

Being prepared for a bear market could position you to get through one unscathed. And so rather than spend time fearing a bear market, set yourself up to get through the next one.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post How worried should you be about a bear market? appeared first on The Motley Fool Australia.

More reading

• Why Appen, Aussie Broadband, IGO, and Kogan shares are sinking today
• The Pilbara Minerals share price just dropped 6%. Time to pounce?
• Why is the Xero share price sinking 6% today?
• Broker says the South32 share price is cheap at current levels
• 2 ASX shares exploding more than 100% on Monday

The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) is having a pretty dire day so far this Monday. At the time of writing, the ASX 200 is down by a depressing 1.24% at just under 7,350 points. So it’s perhaps no surprise that the Pilbara Minerals Ltd (ASX: PLS) share price is also suffering.

Pilbara Minerals shares are currently down by a nasty 6.14%, sitting at $2.68. What a way to start the week.

This latest fall means that the Pilbara share price is now down by a tad over 22% over the past month. so with this latest plunge, some investors, and perhaps lithium enthusiasts, will no doubt be wondering if the Pilbara share price is in the buy zone.

Is the Pilbara Minerals share price in the buy zone today?

So let’s see if some ASX expert investors reckon it’s time to pounce on Pilbara. Stephane Andre from Alphinity and Mike Murray from Australian Ethical Investment Limited (ASX: AEF) recently spoke to Livewire Markets. Here’s what Murray had to say on Pilbara:

It’s a hold for us. We were buyers of Pilbara at around 70 cents and it’s been a wild ride. I think it fell to 15 cents and then up above $3 and now around that $2.50 level. There’s a lot to like about the position of their resource. It’s positioned reasonably well on the cost curve.

Lithium demand is growing probably in excess of 20% per annum due to EV uptake and the market in deficit. When I look at spodumene, the price is currently around that US$5,000 per tonne level. In the long run, we think that will settle somewhere between US$800 and US$1,000 per tonne. So it’s just moved a bit hard on the upside for us.

Buy, hold or sell?

So lukewarm on Pilbara shares right now from Murray and Australian Ethical. But let’s hear what Andre had to say:

[Pilbara is] a buy for me. I still really like the dynamic of lithium. I completely agree with Mike. The growth and demand are going to be significant. Some forecast six times growth between 2020 and 2030. Supply is there, but it’s going to take time to ramp up the supply. So I think there’s going to be a deficit in lithium for quite a few years. So that means elevated prices of lithium for longer.

The company is aiming to triple its production between now and the next five years. So that’s also a strong growth. We think earning surprise and there’s going to be a lot of cash flows. Capital management is also going to be featured here on this stock. So for us, earning surprise on price, volume, and capital management, it’s a buy.

So far more optimism from Andre and Alphinity. It just goes to show that even expert investors don’t always see eye to eye. But one thing’s for sure. Pilbara will be an interesting company to watch over the next 12 months.

At the current Pilbara Minerals share price, this ASX 200 lithium stock has a market capitalisation of $7.96 billion.

The post The Pilbara Minerals share price just dropped 6%. Time to pounce? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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