Is this another bear market?

I’ve been following two technical analysts for several years after the crash of 08/09, which killed my portfolio. Both are saying that the US is in a bear market. Analyst 1 says SPX headed to 1400 to 1575 during 2016. Analyst 2 says SPX headed to about 1100 during 2016/17. Hong Kong stocks have fallen below the value of their net assets for the first time since 1998. Singapore has been smashed. Whilst most brokers retain a positive bias, just like what occurred in 2008! If it looks like a duck, swims like a duck, and quacks like a duck, then …

I’m afraid we are on the slope of hope and are about to get badly burnt for a second time within eight years. So my question is: What do we do with our portfolio, if this is another bad bear market?

A: I don’t agree with the assessment, however, let’s assume your analysts are correct and it is the start of a bad bear market. You largely have three choices:

1. Sell your stocks and move back into cash.
2. Change your portfolio into more defensive stocks – for example, switch into less volatile annuity-style stocks, such as infrastructure, utilities, perhaps stocks like Medibank (while beta is not a perfect measure, change the beta of your portfolio to well below 1).
3. Take out protection. Buy index put options or specific stock puts, potentially an ETF like the BEAR ETF from Betashares.


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