BY LANA SANICHAR

As most readers are likely aware, markets have not been particularly constructive over the last year. In fact, as I write this, we are now in a bear market and even the traditional 60/40 portfolio has had difficulty this past year. I decided to reach out to Ryan Modesto, CEO of 5iResearch.ca, for tips on what investors can do during this time to ensure they are ready for when things eventually improve.

He suggests the following:

Create a watchlist. Building something like a wish list of all of the great companies you always wanted to own shares in but for some reason just couldn’t can be a helpful tool. It is an easy list to refer to when opportunities arise, and those openings are likely to come in a bear market. Ensuring you are on top of potential opportunities and keeping your pencil sharp makes it easier and more efficient to take advantage of those great opportunities if, or when, they finally arrive.

Clean up your portfolio. In a bear market, allocations and weightings can diverge from where they were initially. While it is hard to look at your portfolio in a bad market, it offers a good time to go over your holdings and ensure things are set where you want or expect them to be. It is also a good time to reassess any investments and make sure the initial thesis remains intact.

Update assumptions. Similar to the previous point, the nature of some investments might have changed in a bear market and an investor might need to update assumptions or rules of thumb that have existed for the last few years. One great example of this is in fixed income (bonds). Just a year ago, yields on fixed income were paltry at best. Currently, they look far more attractive. This could lead to a different set of opportunities or assets you might consider now that you would not have considered a year ago. Reviewing your assumptions and making sure they still apply to the current environment can be a prudent action to take while waiting out a bear market.

The past year in the markets was difficult, but knowing my risk tolerance and remembering my long-term goals allowed me to stay calm while waiting for better times ahead.