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Plans for a Bear Market?

#1
A bear market is a period of several months or years during which securities prices consistently fall. The term is typically used in reference to the stock market, but it can also describe specific sectors such as real estate, bond or foreign exchange.
 
This is a very specific question regarding how you will react to a prolonged drop in the Market of 20% or more for 3 months to 2 years.
My reasoning is that QE was gobbled up by the market and it expanded as a result.
Most equities including real estate have benefited by rising valuations.
What do you plan to do when that reverses?
QT has begun with scheduled Fed rate hikes coming on schedule this year.
Tax Reform has thrown a bit more stimulus on the fire, results are unclear right now.
Concrete plans for the Bull need to be made, IMO.
What steps will you take to mitigate losses?
Will you run to cash, buy more, hedge your positions somehow?
What are your plans now?
I've got some ideas but I'd like to hear yours.
 
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#2
~60/40 equity bond mix now,as a recently coined retiree.Plan to slowly get to 55/45 any way.If I had a sustained bear market,would sell some and go to a 50/50(hopefully before it got to more than 20% down) or even less equity depending on what fixed market was offering at that point.
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#3
I'll be making small incremental moves to bookmark where I want to go when the Bear arrives.
I'm a bit late on this one but I've opened a position in PST & TBT.   Longer bonds will be toasted by the rising rates, IMO
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#4
Living mostly on the IRA plus SS, I like to keep about three year's cash, plus another year or more in government securities (many older U.S. Bonds are still paying 4 percent; a few I-Bonds up to 6 percent). Rather than sell when the market swoons, I plan to hold tight and be on the lookout for bargains that might occur within a year of the bottom falling out, as in 2008-9, when a lot of great stocks were 'on sale.' During that time I built positions in V, MA, F, PG, DIS & BDX, and added to a few funds I like (notably FDGRX). Also let dividend reinvestment run for most everything from 2008 to the present.

Of course, we can't count on a repeat of that scenario; but am prepared, should it play out that way. Another consideration is age; it took, what 5-6 years for the markets to recoup what was lost in 2008?  Depending on the mix of what was owned. Being a decade older, I would not be as aggressive next time, but would keep the options open.
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#5
Depending on our income that year I would use the bear market to convert from traditional to Roth IRA's, using cash savings for the taxes.  Percentage wise I would likely want to wind up with no more than 40% in cash and would begin to buy back after a good solid week of market increase.  I would start to sell with a 10% decline in the market, fearing that the crowd would bring it down even more.
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#6
(11-28-2018, 02:37 AM)mrmax Wrote: Depending on our income that year I would use the bear market to convert from traditional to Roth IRA's, using cash savings for the taxes.  Percentage wise I would likely want to wind up with no more than 40% in cash and would begin to buy back after a good solid week of market increase.  I would start to sell with a 10% decline in the market, fearing that the crowd would bring it down even more.

I think a real Bear will last months to years, not weeks.
And it won't resolve/reverse in a weeks time
A real Bear is not the Dip that we've gotten used to experiencing the past 8 years.
That is what I'm planning to weather.
Otherwise, that's part of the plan.
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#7
Start buying gold - ETFs like GLD or bullion or coins?
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#8
@Kwill

I will continue to follow my mechanical strategies all of which take into account a bear market. They have been tested and are trusted to behave correctly. If the SPY falls below a certain moving average (it varies depending on exactly which strategy), my strategies have me suspending all purchases and tightening all stops, both those in the market and those not in the market. Once the SPY regains its position, my strategies have me resuming normal activities.
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#9
I look at everything and believe this is not the Bear that is coming. My personal reflections show this is a pullback and then back to the 52-wk highs for a test. My analysis projects the Bear is coming sometime next year or early 2020. I am not good at projecting length be it weeks, months or years so I'll sit and watch.
 
I've been preparing by rotating my purchases into the sectors that will mostly be protected during the downturns. Then my fundamentals analysis kicks in and I look to the future and when it is time to change direction again.
 
Right now, oil looks like a play with Venezuela in the dumps and the rest of OPEC wanting higher prices while the US and Canada are pumping shale oil into the gaps.
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#10
(12-11-2018, 09:10 AM)arebelspy Wrote: I look at everything and believe this is not the Bear that is coming. My personal reflections show this is a pullback and then back to the 52-wk highs for a test. My analysis projects the Bear is coming sometime next year or early 2020. I am not good at projecting length be it weeks, months or years so I'll sit and watch.
 
I've been preparing by rotating my purchases into the sectors that will mostly be protected during the downturns. Then my fundamentals analysis kicks in and I look to the future and when it is time to change direction again.
 
Right now, oil looks like a play with Venezuela in the dumps and the rest of OPEC wanting higher prices while the US and Canada are pumping shale oil into the gaps.

Well said. Plan your work, work your plan and go have some fun. buy a boat and drink cold beer. stay the course
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