April 6, 2018 – With today’s close of the Dow Jones Industrial Average ending the day down 572.46 points (2.34%), some market forecasters are speculating that we may, after a prolonged run up of equity values, finally be dipping our toes into bearish waters.

Of course, it’s always important to take these forecasts with a grain of salt since nobody can accurately predict the future. Markets go up. Markets go down. Rinse and repeat.

What’s helpful, though, is to remember your money’s exposure to loss when bears start jabbing:

Bear markets usually last about 15 months

During which time stocks usually decline about 32%

Clients of ours often come into large sums of money following the resolution of a personal injury lawsuit. Many have had their ability to earn a living compromised. Many face long and costly rehabilitation and care costs. Some are dealing with the death of a loved one who may have been the family’s sole breadwinner.

Whatever their circumstances, all our clients have one thing in common:

Their risk tolerance for loss is usually less than that of the typical investor.

Structured Settlement Payees Outlast Bears

Our clients who are lucky enough to structure portions of their settlements never need worry about a bear sending them to the canvas. When choosing guaranteed tax advantaged future income, it doesn’t matter what direction the market takes. This adds an unmatched level of security to their lives which makes adjusting to their new, post-settlement reality that much easier.

To help put the impact of a bear market into perspective, consider the real-life implications for someone netting $1,000,000 from a personal injury lawsuit:

As of today, the market is down 10.1% from its all-time high;

If a person’s investment experience mirrored the DJIA since then;

They would only have $899,000 today.

How would you feel if you lost $101,000 in ten weeks?

Balance and Timing

Our general advice to clients anticipating large personal injury settlement dollars is simple: Structure some, keep some, set some aside for a rainy day.

The structured settlement provides the foundation of most of our clients’ financial plans. This is the money they will live off. Their safety net. The money they can count on if everything else fails.

We tell them to keep some in reserve for immediate and anticipated short term needs.

Depending on their risk tolerance, we tell them to not worry too much and take a little bit of a risk with their money. Much will depend on their time horizon and the severity of their injuries, but most people will do well to put some of their money into the market since time usually works in their favor. Just not more than they can afford to lose.

Bulls and bears come and go but structured settlements just keep on paying. For this reason, structured settlements remain a preferred settlement alternative for guaranteed future income and give clients peace of mind.

You might even call them bear necessities?

Boxing bears courtesy of vectorolie at FreeDigitalPhotos.net