Investing strategies and secular bear markets

[winner69]

Essentially winner69 is a long term investor, ie wants to maximise long term returns) but also hates losing money

Winner69 has a strategy:

Since 2000 the underlying hypothesis about long term market conditions that drives my investment habits have been

• The US market commenced a secular bear market period in 2000. This followed a secular bull market that run from 1982-1999
• In a secular bear market long term returns are essentially zilch, even though there can be periods when the market can go up more than 20% in any one year.
• Secular bear or bull markets have in the past averaged 13-14 years
• By implication the NZ market is tied to these long term trends

Winners investment strategy is:

• Because long term market returns will probably be very low become a stock picker and pick long term growth prospects based on fundamentals.
• As market sentiment is stronger than fundamentals and hope only hold stocks that are trending upwards. During times over real market weakness tighten up trailing stops (essentially the Phaedrus long term trading strategy)
• To maximise returns while retaining some degree of diversification perferable number of stocks is 5, but no more than 10 at any one.
• Don't worry about portfolio weights - because all stock picks will be trending up
• Because I understand NZ and Autralia markets and economies restrict stock picks to these markets
• Do not be embarassed to be 100% cashed up if necessary

Whats happening now

In December 1999 the DOW was 11497 - currently 12486 -- up 8.6% over the last 7 years is some effort eh .... see what I mean about a secular bear market .... about half way one through I guess.

Since and inc 2000 the DOW has had 3 up years and 4 down years.... this year prob a down so the score is 3/5 ... see what I mean about a secular bear market

The current downturn is only adjusting for the recent 'bull market' correction that occurs during secular bear markets - and this downturn is only 10% off a high so probably has a lot more to go

Both the NZ and Aust markets have performed much better over the last few years and are currently valued at PEs seen at the highs of market valuations ..... nowhere where they end up at an end of a secular bear market.


Result of all - as of today nearly cashed up .... and not embarassed at all