While we seek to produce strong, long - term absolute returns, we know that losing
less during market declines is an important element of reaching our long - term goal.
Not exact matches
We would rather lose far
less money
during a big
decline than to make 20 % when the
market was ahead by 20 %.»
One can make more profit
during a bull
market, when the value of stock
markets is high, and
less profit
during the season of the bear
market, when the value of stock
markets decline.
So of course even with a balanced or conservative portfolio they will
decline during bear
markets, but as you can see the
declines are far
less severe than an all equity investor.
For the 50/50 and 40/60 portfolios they were back at even quicker at 9 and 6 months, respectively, since they
declined far
less during the bear
market.
These other assets usually (but not always)
decline less during stock
market routs, which cushions the impact to your overall portfolio.
Such a portfolio
declines less during bear
markets as these are «defensive» sectors that hold up well even in recessions.
Historically, strategies that focus on
less volatile stocks have posted smaller
declines during down
markets than those that track the entire stock
market.
Bonds have also been
less volatile than stocks, and they've held up better in down
markets, and that can help investors stay invested, even
during market declines.
Investors who have focused on defensive industries and individual stocks that are
less vulnerable to swings in the economy have tended to outperform the broader
market with smaller
declines during bad periods.
Thus, it is possible for the cash value to
decline or even disappear
during less favorable
market cycles due to cost depletion.