Are You Prepared for a Stock Market Plunge?

Bottom Line Personal ^ | June 1, 2013 | N/A

[Publius804]

It may be days, weeks, months or even years away, but inevitably the stock market—which has more than doubled over the past four years and hit new record highs this year—will descend, as many analysts warn and as history has shown.

How big that drop will be and how long it will last are open to debate. In fact, a large number of analysts contend that the bull market still has plenty of pep, which would mean that you don’t have to take extreme defensive steps for a while.

But even so, it’s important to think about your own financial situation and how it could be affected by an extended pullback, especially because the traditional strategy of shifting toward bonds or bond funds may not work as well this time as in the past. Interest rates are so low that they could surge—hurting bond prices badly. That could happen in the next few years as the economy strengthens and the unemployment rate drops.

Bottom Line/Personal asked four top market strategists to each describe his/her favorite way (in one case, a radical approach and, in others, a more moderate approach) to start preparing so that you can cushion your portfolio once a stock market pullback begins…

[narses]

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[GBA]

Party until 2015?

[Jimmy Valentine]

If you are speculating, price is important. If you are in the stock of stable, well managed companies, with lower price/earnings ratios, then it is about dividend income.