Managed funds cannot deal with a bear market

The global economy is heading into a recession.

Global share markets are in bear market territory.

In a bear market, stocks go down. That is a fact.

To protect yourself in a bear market, you don't rotate into defensive stocks. Why? Because a stock is a stock, and stocks go down in bear markets. 

The best defense in a bear market is to raise your levels of cash, as much as possible. This serves two purposes. Firstly, it levels out the downside. Secondly, it gives you firepower for when the bear market is over and you get presented with a once in a multi-year opportunity to buy stocks at extremely cheap levels. 

Why is it that managed funds, ETF's, and SMA's cannot deal with bear markets? The reason is most are not allowed to move to a majority cash position when stocks are in free-fall. They have to stay invested and they are unable to move quickly enough.

Our managed service can move to 100% cash if we have to. And right now, our clients are sitting on large, defensive positions of cash, patiently waiting for the right time to get back in.

However, would you like to first test out our ideas and analysis?


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Fairmont Equities Australia Pty Ltd (ACN 615 592 802) is the holder of an Australian Financial Services Licence (AFSL 494022) and is licensed to provide general advice. 

The information contained in this report is general information only and is copywrite to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance.

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* All share price charts are courtesy of AmiBroker