How to invest when stocks and bonds fall
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We hear a lot about how our investment portfolios should contain both stocks and bonds, as they generally move opposite to each other.
The theory is that when stocks go down, bonds should protect your capital. The problem? From time to time, stocks and bonds fill up. For example, this year, 2022.
To date, the S&P 500 is down about 15% year-to-date. At the same time, rising rates crushed bonds, with some falling 20% or more.
So what are you supposed to do when there’s nowhere to run, nowhere to hide? Let’s find out.
Stacy Johnson and I are joined by producer and novice investor Aaron Freeman to talk about what’s happening in the stock and bond markets, what to expect and what you should do.
This week’s special guest is David Stein, former institutional money manager and founder of Money for the Rest of Us.
Remember, even though we sometimes talk about specific investments on this show, don’t take them as recommendations, because they’re not. Before investing in anything, do your research and make your own decisions.
You can watch that episode below, or if you prefer to listen, you can do so with the player at the top of this article. Or, you can download the episode wherever you get your podcasts:
Be sure to check out our podcast page for more episodes designed to help you get the most bang for your buck and our YouTube page for more videos.
What’s going on with the stock and bond markets?
Right now, things are a bit crazy in the market. Even though stocks and bonds generally move in opposite directions to each other, these days they are both moving in the same direction – down. We take a look at why this happens and what you can do about it.
How to invest when the stock market is down
A falling stock market doesn’t mean you have to bow out. Our show’s panelists share different investment strategies when the stock market (and bond market) is down.
ETFs mentioned by this week’s guest
Although we do not recommend investments, you might be interested in researching the exchange-traded funds (ETFs) mentioned by our guest. Here are the stock symbols:
- DFJ: Small Cap Dividend Growth
- VTI: Total scholarship
- INFL: Beneficiaries of inflation
- VYM: High dividend yield
- IVLU: International mid cap and large cap
- PFIX: interest rate hedge
Before investing, do your due diligence and make sure the investment is suitable for your risk tolerance and portfolio strategy.
Meet this week’s guest, David Stein
David Stein is the founder of the Money for the Rest of Us investment education platform. Since 2014, he has hosted the Money for the Rest of Us investing podcast and led the Money for the Rest of Us member community. More.
David’s podcast reaches over 40,000 listeners per episode and has nearly 20 million downloads. He is the author of “Money for the Rest of Us: 10 Questions to Master Successful Investing”, which was published by McGraw Hill.
Previously, David was an institutional investment advisor and asset manager. He was a managing partner at Fund Evaluation Group LLC, a $19 billion investment advisory firm. At FEG, David served as Chief Investment Strategist and Chief Portfolio Strategist.
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Stacy Johnson founded Money Talks News in 1991. He is a CPA and also licensed in stocks, commodities, major options, mutual funds, life insurance, securities supervisor securities and real estate.
Miranda Marquit, MBA, is a financial expert, writer and speaker. She has covered personal finance and investment topics for nearly 20 years. When she’s not writing and podcasting, she enjoys travel, reading, and the outdoors.
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