"mlsoft, with the understanding that there is not any blanket piece of advice to serve all investors, all sets of objectives, do you have any personal rules of thumb for asset allocation in bear market phases?"
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aldaka....
When I was in High School, I became enamored of trying to beat the pinball machine at the local pool hall. My dad took me aside and said "Son, when something has four legs, eight balls, and stands with its back against the wall challenging the world, it's best to not fool with it." For the average investor, that is good advice for this market.
The only blanket piece of advice I can give is "capital preservation." If you are trading and hit a slick spot, back off and wait a while until things become clearer to you, because there is still plenty of time before we hit bottom. The winners in this market will be those that have money to invest when the bottom finally does arrive, so those who have their money earning 1% in savings accounts are going to be among the winners.
The only other suggestions I can give are to have some gold stocks, which is the only sector with the potential for good gains between now and the bottom, and avoid "safe haven" stocks - there are none. I expect every sector to be hit hard before this is over, and that is a mantra I have repeated often when folks ask me where to invest.
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"Oh, and since I used the p word, are we in phase one or phase two? To my thinking the question invites distinguishment between old economy and new--which itself is evidence of how profoundly unhealthy things are."
I don't concern myself with which phase we are in - too esoteric and subjective for me. As for differentiating between old economy and new, I don't expect the market to make much distinction. The techs started out higher, so they had further to fall, but all will be hit. PG is as old economy as it gets, but with a PE of 25 in a weakening economy, it is a risky stock that could easily be cut in half or more. The same applies to KO, GM, GE, and many other "old economy" stocks.
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"Finally..... how aggressively do you position yourself at perceived intermediate term lows?"
It depends on how confident I am of the low. Normally, when I think we are near turning points, I exit all my swing trades and do nothing but day trading. When I think a bottom is being put in, I will initiate some new swing trades and a few more than normal day trades, but as a rule of thumb I get more heavily invested the more confident I am in a trend, not a turn.
Hope that helps. Always remember that what works for me or someone else will likely not work well for you. You have to find your own comfort zone.
mlsoft
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