If you are new to stock trading, you must know that bull markets do not trend in a straight line (the same is
true of bear markets).
The reverse is
true of a bear market.
Not exact matches
This holds
true even when one
of the founders calls that foreign
market home, says Danny Wang, a Chinese -
born entrepreneur.
The only
true test
of a money manager's ability is if he can obtain above - average results over a full cycle that includes both bull and
bear markets.
It's
true that if you could find a way to consistently get out
of stocks before a
bear market struck, you could forget about getting rich slowly.
It is
true that the curve has inverted before six
of the last seven recessionary
bear markets, but the lead time is often unpredictable.
The returns on bonds only look good with the benefit
of hindsight and this will be
true again the next time we get a stock
market crash or prolonged
bear market.
In the introductory text for Part I
of their 2016 book, Adaptive Asset Allocation: Dynamic Global Porfolios to Profit in Good Times — and Bad, Adam Butler, Michael Philbrick and Rodrigo Gordillo state: ``... we have come to stand for something square and real, a
true Iron Law
of Wealth Management: We would rather lose half our clients during a raging bull
market than half
of our clients» money during a vicious
bear market.
In this Insight, FQ responds to the question «Is this a bull
market correction, or is it the start
of a
true bear market?»
Because
bear market meltdowns are more frequent than raging bull
markets, the downside protection is a
true value add in terms
of long - term compound return.
True, they would have avoided the emotional pain
of temporarily losing roughly 25 %
of their balance during the
bear market.
Tracking the fund's performance in the
bear market is particularly important because the
true test
of a portfolio is often revealed in how little it falls during a bearish phase.
The performance
of the emerging
market minimum volatility fund is especially concerning to me, as emerging
markets are close to entering a
true bear market, and the minimum volatility fund is underperforming significantly.
With respect to your comment (which I believe to be
true) that all
bear markets end sometime... the damage done by the literal collapse
of the investment banks and resulting losses to thousands
of citizens will most likely take many, many years to be recovered and if we have a «new bull
market» in the near future, most investors will not have enought funds to invest.
The 4 % rule is really a guideline rather than a hard and fast rule — If your equities perform better than expected then you can spend a bit more than the 4 % rule amount however the opposite is also
true, if you encounter a
bear market and the value
of your portfolio drops then you should be prepared to cut back on the withdrawals.
Investors can fill out forms and complete risk - tolerance questionnaires but it's only in the heat
of an actual
bear market that most investors discover their
true risk tolerance.
The
true measure
of investment talent is best defined during
bear markets.
I really don't think luck has much to do with long term results
of successful entrepreneurs, at least not relative to their competitors (I've often heard the following argument: «Well, Buffett invested during the greatest period
of prosperity in US history»... okay, well that's
true, even though he's seen 3 different 50 %
bear markets.
Until the free
market is made to
bear the
true cost
of fossil fuels, including all
of the «externalities» (e.g. degradation
of the commons including the immediate environment, climate change, medical costs that we all
bear through insurance premiums) there will be no economic incentive to revamp transportation energy distribution.
This may seem common - sensical, but after a protracted seller's
market (when multiple offers could be expected regardless
of a home's
true appeal), it
bears mentioning.