Bear market investing

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1. A word on bears

The warning roar of the bear is no match for the thundering hooves of the bull.

You can buy a hundred books on how to pick rising stocks, but hardly any on how to avoid falling ones. You might come across the occasional gloomy article in the financial press, but for the most part editors like to accentuate the positive. And when did you ever hear a fund provider lament the lack of opportunity in equity investing?

The bear hardly gets a look in, and the reasons are not hard to discern:

• Success is more appealing than failure - to all of us.
• Most investors are naturally optimistic - they'd rather read about prices going up than down.
• Bulls have done so well for so long that we've all rather forgotten what bears are like.

Bears, in short, are the party-poopers of the investment world. They spoil the fun.

The trouble is that they are also an indigenous feature of the investing landscape. On average you'll bump into one every 4-6 years. And the chances are you won't be prepared for it. You'll panic and run, or try to fight, or be paralysed with indecision. None of these is likely to safeguard your vital assets.

This course is an invitation to get to know a bear before it gets to know you.

1. A word on bears 2. What is a bear market? 3. Why do bear markets happen? 4. How to spot the appearance of a bear market 5. How bear markets end 6. Bear market investment options: timing the market 7. Bear market investment options: the asset classes 8. Stocks: blue chips vs small caps 9. Bonds 10. Property and gold 11. Cash 12. Stocks: general principles 13. Bear-proofing - low 'beta' stocks 14. Bear-proofing - high yield shares 15. Bear-proofing - sectors that historically do well in bear markets 16. Bear-proofing - sectors that historically do badly in bear markets 17. Bear-proofing - key ratios for selecting stocks 18. Bear-proofing - investing in stocks you know and can support 19. Bear-proofing - pound cost averaging 20. Recognising the revival - a check list 21. Conclusion

• The Bear Book
• Stan Weinstein's Secrets for Profiting in Bull and Bear Markets
• The Great Crash, 1929