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Conservative Investing Can Mean Lower Risk During Bear Markets

Conservative Investing Can Mean Lower Risk During Bear Markets

Conservative investing has its advantages; the first being that you get to sleep soundly at night. Secondly, you’ll gain comfort knowing that when others are facing turbulent waters – you’ll probably be facing much calmer market conditions. 

Many financial advisors will tell you that a defensively positioned portfolio is far more likely to reduce your exposure to problems caused by bear market conditions.

Some of the most notorious bear market declines have lasted several years at a time and have devastated many investors’ holdings.

When you choose high-yield bonds over the stock market, you’ll have lower risks when the next bear market rears its ugly head. Our charts help to demonstrate how the reward-to-risk ratio of an IMS Income account compares to investments such as stocks, growth mutual funds, or brokerage accounts. 

IMS Income may just become your most valued conservative investment once you’re able to observe the performance for yourself.

Most investors have heard of bear markets, some vaguely remember them, and others harbor bitter memories.

The last five severe bear markets, represented by the S&P 500 Stock Market Index, were:

Jan 1973 to Oct 1974     -48.2%    630 days
Nov 1980 to Aug 1982   -27.1%    622 days
Aug 1987 to Dec 1987   -33.5%    101 days
Mar 2000 to Oct 2002   -49.1%    929 days
Oct 2007 to Mar 2009   -56.8%    517 days

The average duration was eighteen months.  IMS Income, which began in 1997, achieved gains during the two bear markets that have occurred since 2000.

Will IMS Income avoid the next bear market?  Regulations make a prediction inadvisable.  We encourage investors to review our 23-year performance record and make their own judgements.

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