Strategies for Profiting in a Bear Market
17 Continuous Years of Profitable Investment Advice Since 1992
(By the time we exited them in March 2008, our U.S. 30 year Treasury Bonds had experienced gains of over 91% implementing a safe investment strategy during this bear market)
On October 25th, 1999, Jim Shepherd's Model issued its first sell signal since 1994, which was the first warning that the great bull market was over. Subscribers were immediately advised to sell all stocks and to prepare to start using alternate investments (U.S. 30 year T-Bonds) that would profit from the changes that were coming. These changes have already, and will in the near future, present new opportunities for profit, some of which may be greater than at any time in modern history.
The following is an outline of the main investment strategies that we will use as this bear market progresses or in the event that the Model warns of an imminent crash.
- Government Debt Instruments have been and will be used again to preserve our core capital. As the economy continues to weaken, interest rates will continue to fall and these debt instruments will appreciate even further in value. Since the original recommendation on October 25th 1999, these instruments increased in value by over 91%. In the event of a market collapse these debt instruments maybe utilized again and could conceivably provide further high double digit percentile return.
Risk Rating: Low with correct timing
Leverage Rating: Low
- This next step would involve the utilization of an ETF (for those who desire to use mutual funds, a bear market Mutual Fund may be selected) whose value is inverse (opposite) to the performance of the S&P 500 Index. If the S&P Index were to collapse or continue to drift lower losing 50 to 60% of its value, this fund would
increase in value in relation to the leverage selected (greater leverage brings greater risk!).
Risk Rating: Moderate with correct timing
Leverage Rating: Low
- High Beta Government Debt Instruments (there are several types that may be
recommended depending on circumstances at the time) that offer rapid
appreciation in the event of a stock market collapse. The value of these
instruments could appreciate by as much as 500% in the event of a market
collapse.
Risk Rating: Moderate with correct timing
Leverage Rating: Moderate
- Leveraged Instruments will be used for maximum profit in the event that an imminent crash signal is received from the Model. These
instruments will explode in value as the market collapses and could provide
returns that may exceed the average of 6400% gains realized (after fees and commissions) during the 1987 crash.
Leveraged Instruments are not recommended for all investors.
Risk Rating: Very High, correct timing is crucial
Leverage Rating: Very high