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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: eims2000 who wrote (68141)	3/11/2001 1:54:13 AM
From: Cheeky Kid	Read Replies (1) \| Respond to of 122087

If I am not mistaken, this was written years ago, found it in my Palm, now REX and soon to be Visor database: Beware of bears TONY WANLESS Ever known a bear market? Even if you're a seasoned investor, it's likely you haven't because - except for a few corrections - stock markets have been on a bull run for 15 years, one of history's great market updrafts. But seasoned market-watchers point out that such runs can't go on forever. There's always a bear after a bull, and, no, this time, it won't be different. It never is. Legendary Canadian investor Andrew Sarlos, who died last month, makes precisely that point in his recently released book, Fear, Greed and the End of the Rainbow. For 30 years, Sarlos dispensed advice as freely as he made bags of money in the markets. In the book, he asserts that the big bull is exhausted and will soon die off, to be replaced by a bear market in which values could drop as much as 50 per cent. Lots of People Could Be Hurt And worse, the severity of a bear market depends on what the bull was like. This is going to hurt a lot of people, he said. Most investors today, especially those millions of people pouring billions of dollars into mutual funds, have never known a bear market, and assume markets will always go up. Because of that, they see market corrections as mere buying opportunities. Indeed, he points out, many investment strategies, such as dollar cost-averaging and buy and hold, are based on the belief that markets will always go up. And, so far, they've always been right. But what if they don't? What if markets fall, and stay low for years? Thousands of people, especially baby- boomers desperately trying to save their million-dollar retirement funds, will be all but wiped out, he said. And not only that, they'll contribute to a continuing decline in the market, because, having been burned, they'll shun stocks like the plague. Sarlos advocates a long-term approach to this possibility. He suggests, for example, that people move more into short-term cash vehicles, based on the belief that you're better off to be right too early than wrong too late. Then hunker down and wait for the prolonged bear to play out. Investors on a High This won't be easy because everybody's euphoric and high on stocks right now. And no one knows when the bear is coming. When everybody is gloomy about stocks and refuses to go near them, you start buying them up again, he said.