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1.
During a period of rapid inflation, what usually holds up well?
Hard assets like precious metals and commodities, as well as inflation-linked bonds. Hard assets and inflation-linked bonds provide a bulwark against inflation, while many other asset classes gets ravaged.
2.
What's perhaps the best way to bear-proof a portfolio?
Build a diversified portfolio that owns a little bit of everything. Timing the market by moving to cash rarely succeeds, while bear-market funds will lose money during a bull market.
3.
The investments that perform poorly during bear markets tend to be the same ones every time.
False. Each bear market attacks in different ways. Certain sectors tend to be hit harder in different ones.
4.
In historical terms, bear markets are normally _______ in length.
Brief. On average, bull markets have tended to be longer and bear markets shorter.
5.
During a period of deflation, what usually holds up well?
Intermediate- and long-term bonds. Bonds tend to hold up relatively well in deflationary environments. Because their dividend income payouts are effectively worth more in this type of economy as the prices of goods decline, their purchasing power actually grows in deflationary environments.
