By JULIA ANDERSON
 U.S. stock markets are taking a beating with the Nasdaq now into bear market territory, down 20 percent from its August 2018 high. Apple forecasting lower earnings. The Dow Jones and S&P 500 are off 16 percent and 18 percent respectively from their highs. This week, we saw the biggest stock market sell-off since 2008.
 
This, my friends, is good news!!! Stocks are going on sale. As Warren Buffett says, "Be fearful when others are greedy. Be greedy when others are fearful."
 
With share prices down, investors have a buying opportunity not available during most of the past 10 years. That’s because since the Great Recession, markets have been steadily marching higher…the longest bull market in history.
 
Trillions of dollars floated around the world in the past decade, thanks to easy money from central banks. It makes sense that a great place to park money has been in the U.S. stock market. The money has flowed in, pumping up share prices. Over the past 10 years, the value of many individual shares more than doubled. The S&P 500 (the 500 biggest U.S.-based publicly traded companies) has increased by about 300 percent. That’s even with two corrections, the first in 2011, the second in 2016 when the S&P declined 14 percent.
 
Now, those who study the big picture, say we are over-due for a pull-back. Bull markets do not go on forever, even this one. They take a breather. They sell off when company shares are over-bought and over-priced. In other words, buyer enthusiasm out-strips performance. Reality must eventually set in as it is right now.

Share prices will more accurately reflect true value as they relate to earnings and profitability. It’s called a free market tied to honest (rule-by-law) quarterly reporting.
 
This year, volatility returned to markets. Up 500 points one day, down 600 points, the next. Graphically, this looks like the edge of a saw with jagged, sharp pointy ups and downs. News flash: This is typically how bull markets end.
 
Investors in their 20s, 30s, 40s and 50s should be celebrating the pull-back because this means quarterly dividend money reinvested inside their 401(k) and IRA tax-deferred funds will be buying more shares at cheaper prices. More shares mean more returns going forward as U.S. publicly traded companies continue to pump out earnings. The miracle of compound interest (dividend reinvesting) LIVES!!!
 
Those nearing retirement or who are in retirement must embrace a more complicated strategy:
 
Rule No. 1: Don’t try to “time” the market by pulling all your money out. It’s too late and besides you will miss the rebound.
 
Rule No. 2: Keep most of your nest egg in stocks or stock funds. Don’t touch them. Let the dividend returns reinvest. Hopefully, you have enough cash and/or income to live on while you ride out the downturn.
 
On NPR this morning, a young economic analyst gave me the impression that people who are nearing retirement should move their money into more secure savings such as CDs or money-market funds. Hogwash!  If you do that you will run out of money before you die.

There’s nothing wrong with the American economy or its stock markets. We are just adjusting to higher interest rates (a good thing), a cooling housing market (another good thing) and more reasonable returns from corporations.
 
We are coming off the biggest bull market in history. It makes sense that volatility will return to markets, that we will see a sell-off in over-bought shares such as Facebook, Amazon and Google. Let’s see earnings in line with operating costs, let’s see Price-to-Earnings ratios at 20 to 30 points rather than 70.
 
By the way, ignore what’s going on in Washington, D.C. Warren Buffett said he never made an investment decision based on what happens in Washington. 
 
Question: Where am I putting my money in 2019?

Answer: Individual corporate stocks such as Idaho Power, Duke Energy, MMM and McDonalds. Along with substantial amounts in S&P 500 index funds, a telecom index fund and a contrarian stock fund, all inside my tax-deferred 401(k).

I am NOT selling or trading any of these holdings. Even though I am required to withdraw cash from my 401(k), I am doing it out of a small cash fund. I have the rest reinvesting for the long-term.
 
The outlook for the U.S. economy remains positive, if not more normal. A 3 percent GDP growth rate is good. Job growth is good, consumer spending is positive. Inflation remains tame thanks to cheaper energy…. gasoline, oil.  The Fed’s ability to raise interest rates is a good thing.
 
Don’t panic over the market down turn. Stay the course. Reinvest the dividend money.
Stocks are on sale!!! Buy low and hold on. 



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 "In order to rise above this fear, you need to be confident and comfortable in the moment and with yourself." - Lisa Haisha, creator of Transformative Therapy. 

By Julia Anderson
Women are more likely than men to under-rate themselves when it comes to investing. Yet women are usually in charge of household budgets, are more willing to save for the long-term and are better bargain hunters.

So why do we feel uncomfortable when it comes to taking charge of our investments be they a 401(k) retirement plan, an Individual Retirement Account or a retirement stock portfolio? Friends give me these reasons:

“I am just not interested...that’s something my spouse takes care of.”

“We like our financial guy…he seems to be doing a good job for us.”

“When I met with my financial adviser, I thought we were on track. But I never asked questions."

“I feel over my head when it comes to the stock market, bonds. I’m clueless.”

Yet most women over 60 will someday be financially on their own either from divorce or the death of a spouse.  Why not get involved now, take charge of your finances and be ready for the future when you may need to manage on your own?

5 ways to take charge

No. 1 Ask about investment management fees.
If you still are on the job make sure you are getting the best performance from your 401(k) plan or Individual Retirement Account. Annual management fees should be 1 percent or lower. If retired and living on your nest egg, the same goes. The goal is to make your money last as long as you do. Mutual fund management fees are a huge factor in how much you accumulate from compound reinvesting during your work life and how much your nest egg will keep earning for you in your later years.

No. 2 Check up on financial advice costs.
Are you are using a financial adviser to guide your investment strategy? Ask about upfront commissions on investment products or funds offered to you? Anything more than 1 percent deserves a clear explanation. Why not go with dividend-paying individual stocks or low-cost index funds?  The reality is that most “managed” funds do not have the performance of a cheaper S&P 500 Index fund (see WSJ link below) but instead tend to have higher management costs and weaker performance. That’s a big negative in the longer-term.

No. 3 Banish your insecurities.
Investing is rewarding.Start learning by doing. Wealth coach Deborah Owens gives women an “F” when it comes to finances because of the myth that “financing and crunching numbers are too complicated.” Owens (www.deborahowens.com) encourages women to get beyond the fear and take on “calculated risk” with their money. Sitting on cash is not an investment strategy.

To get the most bang for the buck, put time into improving your investment knowledge and skills, ask questions about management fees and commissions and don’t just hope for the best without bringing your retirement picture into focus.

“Your ability to build wealth is directly related to your ability to take calculated risks,” Owens says. That’s now and in retirement.

No. 4 Build a portfolio. Set up an individual online investment account.Do the research. Start small. Use low-cost online brokerage firms. Put money into an S&P 500 stock index fund and/or a few blue-chip publicly traded companies with a stock dividend of about 3 percent. Reinvest the dividends. Don’t panic in a market downturn. The reinvested dividend money is buying more shares at a cheaper price!

Meanwhile, keep an eye on business news. Shifting markets may require adjustments. The goal is to balance risk with a record of performance over time.Candace Bahr and Ginita Wall at www.WIFE.org encourage women to take on financial responsibility and they remind us that for most “A Man is Not a Financial Plan.”

In their “Five Steps to Building a Portfolio,” they recommend reading “how to” books on saving and investing, using rating reports and staying up on financial news to gain confidence.No. 5 Get real about retirement income.

Step 5: Figure out where your income in retirement will come from by first looking at your Social Security account at www.socialsecurity.gov. What are your benefits at 62, 66 or 70? What income will you have from tax-deferred retirement savings or investment income? Will you inherit money from your mother?

Will you work longer to delay retirement and increase your Social Security benefit? Can you catch-up by putting more money in your nest egg? Answers to these questions will help you know where you stand and what you must do before quitting the job. 

The trick is to bring retirement household expenses in line with expected retirement income.Plenty of women have made the transition from work to retirement. I see them managing their money, traveling, starting up new relationships and getting the most from life. Taking charge of their finances is a key element of their confident future.Editor's note:

Helpful follow-up links:
www.deborahowens.com

www.wife.orgwww.wiser.org Divorce and widowhood

http://www.wiserwomen.org/index.php?id=94

www.socialsecurity.gov

Wells Fargo Investment Institute
https://www08.wellsfargomedia.com/assets/pdf/personal/investing/investment-institute/women-and-investing-ADA.pdf

Wall Street Journal
https://blogs.wsj.com/moneybeat/2017/04/12/for-90-of-all-stockpickers-a-decade-and-a-half-of-underperformance/

​https://www.wsj.com/articles/SB10001424052748704281504576331173793741378