We view markets as having three distinct phases: Ups, Downs, and Recoveries. Down markets are an inevitable part of investing, yet they often spark fear and uncertainty, especially among affluent investors who have spent decades building their wealth. While no investor enjoys seeing their portfolio decline, understanding the typical phases of a down-market and how different investment strategies perform during these periods can help investors stay the course and make informed decisions. The Phases of a Down-Market Historically, bear markets tend to follow a predictable sequence of events. While no two downturns are identical, recognizing these phases can help investors maintain perspective and avoid panic-driven decisions. 1. The Early Decline: Denial and Complacency At the start of a down-market, many investors dismiss the warning signs, attributing declines to temporary factors. Optimism remains high, and many market participants see the dip as a buying opportunity. However, as negative data mounts – whether it’s deteriorating corporate earnings, tightening monetary policy, or geopolitical instability – the downturn accelerates. 2. The Panic Sell-Off: Fear Takes Hold As losses pile up, investor sentiment shifts from optimism to fear. This phase