How to arm yourself for a possible bear market


Are you prepared for a possible bear market? "The best way to deal with the bear is to arrange things in advance so you don't have to rejiggle much after the bear hits," says Walter Updegrave, author of "Investing for the Financially Challenged."

"Build a diversified portfolio so when stocks go down, other assets may keep rising. You may lament lost opportunities while stocks skyrocket, but a balanced approach - the right stock-bond mix - is what owning a portfolio is all about."

WARNING: "Beware of day-trading abuses and risks," says David Nassar, Market Wise Securities. "Few firms make all risks known. Most day traders lose money, some lose a lot. Some firms have low minimum balances that let people 'day-trade' even though they can't afford the losses."

EMPTY NEST: "When your children leave home, modify your investment strategy," advises Edward Mendlowitz, CPA. "You're no longer saving for college education but instead for your own retirement. With this long-term focus, buy growth stocks, bonds and five-year CDs."

WALL STREET WATCH: "An end to Greenspan's interest rate hikes would be a good thing for stocks - unless the reason for the halt is a tanking economy." (Worth magazine)

"Remain cautious as this consolidation phase lasts a little longer. Taking half-position profits in big winners has wiped out many investors' small losses." (Basil Chapman's Marketline)

"The bounce off the market's May 26 low has been unconvincing. It may not be until mid-fall that stocks resume their strong uptrend." (Equity Fund Outlook)

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