Some thoughts on Bear Markets.

Some thoughts on Bear Markets.

I recently heard the perfect definition for a bear market. A Bear market
is an extended period of time where people who think this time it's
different, sell at prices we'll never see again, to people who know this
time is no different!

As I watched CNBC the other day, the headline read "A Bear Like No Other."
It would be easy to fall into the trap of thinking this bear market is
different. We have learned about CDOs, Mortgage Backed Securities, illiquid
fixed income products, toxic debt...all unique problems from the Grisly
Bear Market of 2008. But, regardless of the cause, bear markets have many
common characteristics, and they generally end with a capitulation, when
the lion's share of nervous investors have surrender. Almost everyone knows
that they should buy low and sell high, but the reality is, most investors
do exactly the wrong thing...after all, prices fall when there are more
sellers than buyers, and peak at the zenith of buying euphoria. The nature
of markets dictate that the majority will buy high, and sell low.

Let me share a piece I think is useful;

Four Reasons to stay invested

1. Long term growth prevails
2. Emotional investing works against you
3. Bull markets are more effective than bear markets
4. The market works against market timers

Research shows that the average bear market results in a decline of roughly
30% whereas the average bull market generates a gain of 200%

I have ideas relevant to long term growth, capital preservation, and
income, depending on your needs.

Please call Ann, Greg, or me, if you wish to discuss positioning your
situation.
Jeff Wareham, CFP, RHU
Wealth Advisor
ScotiaMcLeod
148 Fullarton Ave, Suite 1801
London, ON
N6A 5P3
519 660 3260
http://www.jeffwareham.ca
1 800 265 1242