Vancouver, BC (August 21, 2001): Your definition of bear markets may differ from that of a colleague, but the results are very similar. Continuing volatility and loss of capital value are traits of the prolonged bear market we find ourselves in.

Adrian Mastracci, fee-only investment counsel and financial advisor with Vancouver’s KCM Wealth Management, asks, “What strategy should a prudent investor consider during our seemingly never ending bear market?”

“This experience touches us all, including the professionals,” noted Mastracci, “The markets just can’t seem to turn off the tap of economic malaise.”

“By my count, this is bear market number ten since World War II,” indicated Mastracci, “So don’t fold your tent. Rather, stand up to the bear as high as you can. You may still experience some mauling, but at least the severity of the damage will be contained.”

Mastracci says, “I’ve reviewed the previous bear markets that now seem a distant memory and I have assembled five venerable bear market wisdoms. They help keep your investment cool while you’re up close and personal in the face of the bear.”

Adopting Mastracci’s five market wisdoms for taming the bear is simple:

1. Don't panic. Bear markets are a natural part of your investment experience. If you adopt one wisdom only, then factor in the effects and implications of a prolonged bear market into your investment expectations. You may need extra patience to weather the storms, but you will improve the probability of achieving your unique goals.
2. Consider your time horizon, appetite for risk, investment personality and minimum investment return to achieve your chosen destination before making your asset allocation decisions. Find a trusted investment professional and draft your investment game plan. Seasoned investors don’t make their selections from the “investment school of stuff happens”. Building a home and a portfolio have much in common – the end results are far better if you start with a blueprint for each.
3. Forget market timing. It doesn’t work often enough. The 1990 Nobel Prize winning studies demonstrated that market timing explains, on average, 2% of the contribution to total return. That’s a low percentage strategy!
4. Limit your exposure on single stock investments to levels prudent for you, especially if the company also employs you. In baseball, it’s preferable to get on base frequently, rather than aiming for the home run every time. The same applies to your investment portfolio. Trying to achieve your portfolio return on one or two selections is another low percentage strategy fraught with financial dangers. The occasional investment home run is exciting, but it’s the losers that inflict serious portfolio damage.
5. Always remember your long-term goals when investing, especially financial independence and retirement. Become familiar with the capital value required to look after your long-term needs. Objective advice from your investment professional helps to maintain your perspective and improves your investment decisions.

“Adopting these five venerable wisdoms will not only help you through the painful bear market experiences,” indicates Mastracci, “They also set the stage for the day when the sun will rise and shine again.”

Mastracci summarizes, “The successful bear market strategy is to face the bear on your terms while keeping your investment cool. This will navigate you through the often stormy waters towards your destination.”

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.