It s empowering to be able to know that I can cut losses short and let gains run. It keeps my mind concentrated on doing the right thing each day, rather than succumbing to all emotional swings that most investors go through in up and down markets. If an investor s mental process is not sharp and disciplined, the market has ways of teaching that investor what risk really is. Unless investors prescribe to the paradigm that the new economy has created a stock market that is a money machine and always goes up, then they should consider professionally managed dynamic strategies for at least a portion of their diversified portfolio. As the market wavers between recovery and continued down-slipping, finger pointing is well underway to target who did the dastardly deed of killing the greatest bull market in history.
Bear markets happen precisely because their exact timing is hard to predict.
It s like adding grains of sand to a weighing scale. Eventually the scale drops as the sand outweighs the counterbalance. Start taking out sand and it rises again. In recent months, lower stock prices, rising energy costs, higher interest rates and the technology sector downturn all struck at once. The market s upward trend faltered then fell.