PEORIA MAGAZINE November 2022

G U E S T C O M M E N T A R Y

T he stock market began its current slide on Jan. 3, 2022, and was confirmed a bear market – generally defined as a drop of 20% – on June 13. The big question on many investors’ minds is what to do now. The average bear market lasts 11 months, but this cycle has no obvious expiration date. We’re nine months in, so history indicates we’re closer to the end than the beginning. THE AVERAGE BEAR MARKET LASTS 11 MONTHS… WE'RE CLOSER TO THE END THAN THE BEGINNING The ability to maintain “staying power” in markets can be worth its weight in gold over time. A famous example is Rick Guerin. Most people are familiar with Berkshire Hathaway and the partnership between Warren Buffett and CharlieMunger, but the duo used to be a trio. In the 1970s, Buffett and Munger had another partner named Rick Guerin. Buffett told the story: Rick invested on margin because he was so bullish on Berkshire Hathaway stock. During the bear market of the 1970s, Rick got flushed out. He couldn’t pay his margin debt andwas forced to sell his Berkshire shares back to Buffett at $40 a share. As of Sept. 29, 2022, Berkshire A shares fetched $406,700 a share. Every investor must be able to survive bear markets. Also, with just a few months left in 2022, most taxpayers have a good idea where their income will end up for the year, so it is time to review your tax situation and act before the year-end deadline. Here are some tips intended to ease the pain. INCOME PLANNING The Tax Cuts and Jobs Act of 2017 reduced income tax rates for individuals through 2025. With these

SURVIVING A BEAR MARKET

BY DARYL DAGIT

108 NOVEMBER 2022 PEORIA MAGAZINE