MarketTrend Advisors - Coping With Bear Markets 023009
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This presentation provides a historical review of the returns of prior bull markets and bear markets and recommends an active investment strategy to capture gains and avoid losing money during secular bear markets.
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MarketTrend Advisors - Coping With Bear Markets 023009
- 1. Coping with Bear Markets Don Lansing, Chief Investment Officer
- 4. Secular Markets in More Detail
- 11. Follow the Trend: Invest in the Bull; Avoid the Bear
- 12. Or Be Aggressive and SHORT the BEAR
Editor's Notes
- Let’s begin by discussing the challenges individual investors face. Most of us have a pretty strong emotional component in our makeup. Unfortunately, these emotions are our greatest enemy when interacting with the stock market. I have a client who watches his portfolio every day – that’s not unusual, of course. And almost every day he has some comment to send me about it. When the market has a big up day, he wants to know why we don’t have more stocks and whether we should add some. Then, the market drops and he wants to know why we have so MANY stocks and whether we should sell some. This type of emotional reaction to the market wears the poor guy out (and sometimes me as well!). Indeed, even his doctor has told him to stop watching the market. But he seems unable to. Left to his own decisions, this fellow, who is a smart guy perfectly capable of investing well, would be jumping in and out of the market all the time. The results would be, and have been at times, disastrous for his portfolio. More unfortunately, many studies have found that my friend here is not the exception but the RULE when it comes to individual investors. Individuals react emotionally to the market and make their decisions accordingly. They overtrade, buy when they should sell, sell when they should buy, and so on. As a result, many of them give up in frustration as they fail to make any money in the stock market. This morning, I will present an investment strategy that tries to help us avoid these common problems. It’s a simple strategy that requires just a couple of rules and keeps you from suffering from years like 2008 will benefiting from the good years.