407 Introduction to Bear-Proofing Your Portfolio
Bear markets worry a lot of investors, and for good reason. Can you bear-proof your portfolio? Some investors think so. Others think the best one can do is ride out the storm. Let's look more closely at bear markets and the different ways investors survive them.
What you will learn
- A Bear Is Not a Bear Is Not a Bear
- Three Varieties of Bear Markets
- What to Do in a Bear Market?
What do you know?
Introduction to Bear-Proofing Your Portfolio
The investing world's jargon is sometimes too colorful. For example, there are "bull markets," or periods in which a particular type of investment does exceptionally well. Less pleasantly, there are "bear markets," or times when a particular type of investment performs poorly. Definitions of what constitutes a bull market vary, but a period in which a given market segment drops by 20% is usually considered a bear market.
Now if only we knew when those bears would roar, or what investments would survive the mauling. But because each slump brings its own new twists, yesterday's bear-market hero may not survive the next downturn nearly as well. Besides, even if bear-proofing a portfolio were simple, it may not be smart.
