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1.
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.
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.
Bond funds often perform well, relatively, during bear markets in stocks.
True. Though not a given, historically they have held up well.
4.
During a recessionary period, what usually holds up well?
Health-care stocks. Stocks of companies that produce must-have products, such as drugs or food, tend to do best during recessions. Those investments dependent upon a healthy economy, including junk bonds and cyclical stocks, tend to do poorly.
5.
During a bear market, _______.
A particular type of investment performs poorly. Investments lose money during a bear market. Not all bear markets are marked by rising inflation or recession.
