Monday, July 27, 2009

Understanding The Bear Case

As an investor it is important to have an understanding of the bear perspective as it relates to this market. Tyler Durden of Zero Hedge, in conjunction with David Rosenberg, Chief Economist & Strategist at Gluskin Sheff + Associates, Inc., have assembled a research report that outlines the challeges facing the economy and market. Their report is detailed below.
The End of the End of the Recession

At this point in time, I do believe we remain in a secular bear market; however, cyclical bull phases do occur during these market phases as I have noted before. The following table from Crestmont Research details the historical market phases going back to 1901.
Secular Bear Market Table

As the above table notes, investors can still make money during secular bear markets. One key is to structure the portfolio in investments that hold up better during market pullbacks. Given the strength and duration of the recent advance off of the March lows, some consolidation of gains is certainly probable.

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