Thursday, February 11, 2016

Plan for Bears

You cannot time the market. You will not know ahead of time when the market will be moving up or down. But, the fact is we have had bear markets in the past and will have then in the future. It is just we never know when or how bad any bear market will be. The thing is, if you are in a market there will be times of expansion and times of contraction.

If you own a house or a condo, you should know at the least about the last two bear markets in real estate in your area. You should have at least an idea on how you would handle such a time.

I am into stocks. I have been through a number of bear markets. I expect to go through bear markets in the future. I just do not know when.

I see lots of newsletters saying that they know people who had tried to ride out a bear market and have lost money. Of course the value of your portfolio will go down in a bear market. But, you only lose if you sell and turn paper loses into real losses. Newsletters that promise to help you sell to protect you from such a lose make money by selling you a newsletter.

No one knows when to sell. No one can tell when the top or the bottom of a market is. The only thing that is possible to know is if the market is relatively high or relatively low.

If you have basic solid companies you will have no problems going through a bear market. I have done it many times. Do not panic and sell. The other thing that happens in bear markets is some dividend stock cut or cancels their dividends. This will happen in every bear market. However, other dividend stocks keep their dividends level and some raise theirs. What I have found in bear markets is that dividend increases for my portfolio slows down.

If you are buying companies just for capital gain, you might have some problems in a bear market. It depends on what sort of companies you own.

On my other blog I wrote yesterday about Canadian National Railway (TSX-CNR, NYSE-CNI) learn more. Tomorrow, I will write about Manitoba Telecom Services Inc. (TSX-MBT, OTC-MOBAF)... learn more.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.


  1. Such fantastic advice! Your thinking always reminds me why it's great to be a dividend investor! Keep up the great work!

  2. Hi, I just discovered your blog a month ago. I am new to investing and after much research, i believe that building a dividend passive income is the way to go for our retirement. This is also due to the amount of tax credit we get for dividend income. So far, I have added national bank, scotia bank and riocan to my freedom fund portfoio. I have a wishlist of stocks. I am always out to look for dividend growth stocks that pay good dividends. Thank you so much for sharing on your blog. I follow it daily.


    1. I started out with BMO, BCE and Labatts. Labatts was later bought out, but I still have BMO and BCE.


  3. Thanks Susan for the excellent advice ,i have been
    following your blogs for a couple of years now ,and
    it changed my way of investing completely !