The Big Bear

[freedom]

How much drop is considered a bear? 10%, 20% 50% or 80%?
http://stockcharts.com/freecharts/histor...a1900.html

Bear market investment is certainly very profitable but there is a also a thing called super long bull market.
US dow jones rose continuously from 1988 to 2000. Subsequently, the market tanked 30-40%.
But, for those investors that were waiting for the bear to strike since 1988, it did seem a bit too long and the index had risen too high.
The subsequent major drop to 7300 pts was still much much higher than 1738 in 1988.

I certainly would not want to be the investor that was holding to cash in 1988 and waiting for a major drop.

There are 2 schools of thought

- Holding cash and wait for grand sales during bear market
- Fully invested at all time. Rotate fund for grand sales during bear market

IMO, both have their own merit. I have chosen the later

I think my method lies in between. always not fully invested. but not holding a lot of cash, either.

to rotate funds is not an easy decision. You buy normally means you see value.