You Need A Plan For Next Inevitable Bear Market
Chris Ciovacco | Jan 05, 2014 12:22AM ET
Not If, But When Next Big Drop Comes
As Bloomberg :
The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said today in remarks prepared for a speech in Philadelphia. The chairman, who has led the central bank during its record quantitative-easing program, ends his eight-year tenure on Jan. 31. Bernanke said the decision to taper bond purchases “did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed.”
Investment Implications
Once the declines begin in the early stages of the next bear market, stress levels will begin to rise dramatically. We all make better decisions under low stress conditions. Therefore, now is the time to begin formulating your “inevitable bear market plan”.
The articles below may spark some additional ideas during your plan development process:
- 2007/2013: You Will Never Look At The Markets The Same Way Again
- Tired Of Missing Rallies? 4 Ways To Improve Your Game
2014: Some Mild Deterioration
In early January 2014, the observable evidence, which is based on supply and demand, continues to call for an investment allocation with exposure to growth-oriented stocks. Therefore, until the evidence shifts meaningfully, we continue to hold our positions in U.S. equities (VTI), technology (QQQ), financials (XLF), energy (XLE), small caps (IWM), and global stocks (VT). Based on some mild deterioration in the market’s risk profile, by rule, we did take a very small incremental step to reduce our exposure to stocks Friday, which increased our money market balances.
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