Keep in mind that the typical
bear market loss averages about 30 %, but even moderate losses can do a lot of damage to long - term compound returns.
In contrast, «The trend is your friend» is quite useful in reducing the depth
of bear market losses, but most popular variants underperform the market over time.
The Swan Defined Risk Strategy (DRS) * is designed to seek consistent returns, while seeking protection against
major bear market losses, with a reliable performance track record since 1997.
It's a good reminder that the average
bear market loss represents a run - of - the - mill market retreat of about 32 % and wipes out more than half of the preceding bull market advance.
Problem is, an overly aggressive approach could also backfire, especially if stocks are rocked by 50 % - or -
better bear market losses just as you're on the verge of retiring.
Again, it is the absence of an obvious bubble in any individual sector, and instead a bubble in profit margins across the entire corporate sector, that is likely to be the «hook» that drags investors deep into
eventual bear market losses.
For one thing, the SPDR Gold Trust (GLD) is still reeling from 35 %
bear market losses since the heyday of 2011's euro - zone crisis.
It took several years for
those bear market losses to be fully recovered.
For those who are fully invested at present levels, this best case portfolio return of 2.8 % to 4 % annually is before fees and taxes, and assuming no negative or
bear market loss years in the investment horizon.
Not only that, but
your bear market losses between June 2008 and February 2009 would have been around 18 %, versus an average loss of 23.5 % for balanced funds.
The BMO Asset Allocation Fund and the RBC Monthly Income Fund (series F) outperformed the index portfolio on three important benchmarks — the extent of
their bear market losses, the magnitude of their subsequent recovery between March and June of this year, and their five - year average returns.
On average, the first 100 trading days of recession - induced bear markets contain only a quarter of
the bear market losses and have lower volatility compared with the full downturn.
That's almost $ 1 trillion more than entire 2000 - 03
bear market losses of $ 5.76 trillion.
I don't recall ever reading a Bernstein recommendation for a 25 % equity allocation other than the table I referenced in which he recommends 30 % equity for extremely risk - averse investors who could tolerate no more than a 10 %
bear market loss or 20 % for a 5 % loss.
It took several years for
those bear market losses to be fully recovered.