Investing during a Bear Market Message Board

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Strategies & Market Trends : Investing during a Bear Market

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To: Bearded One who wrote (2)	11/11/1997 1:05:00 AM
From: Stingray	Read Replies (1) of 226

Interesting thread. Bear markets can create very good investment opportunities, but only after stocks get beaten down so far that they are grossly undervalued. We could not be further from that point - stocks are more overvalued than they have ever been and have a long way to go before they reach fair value, yet alone become undervalued. I think that there are a lot of people around who want to get rich quick but right now there is more danger than opportunity in the market and it is better to focus on making money slowly but surely. For me any form of investment right now must focus on capital preservation, and at this stage of the market it is better to be safe than sorry. Bonds and cash both look pretty good. I have a core holding of a few stocks but I'm not planning on increasing my holdings unless we go down another 20% from here, and I would only nibble at the market at that stage. I think that cash is king and the name of the game in a bear market is to be the last person around who has cash and wants to buy when no-one else does. I'm prepared for quite a bit more upside. A lot of money is flowing out of emerging market and international funds into US stock funds and this could propel the market higher even as earnings growth slows. If anything the recent "correction" has only increased the bull market fever even as it appears to be on it's last legs. I have some puts's I'm interested in picking up if the market does indeed go to new highs (VGEMJ if I can get it for 1 point) but I'm not ready to add to my long positions, shorting is too dangerous and with the current volatility level puts are overpriced. I wish I had a better answer but right now I think that any investment which ends up not losing money will look pretty good a few years from now.

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