Chris Watling from Longview Economics answers the question of where to and where not to invest in a bear market. His view since November has been to start raising cash. “Every 7 or 8 years cash is king. I think we are in one of those positions where you want to keep your powder dry, you want to step back and see how it plays out… Of course scenarios can change and one can always be wrong but once in a blue moon when the risks are high, as I think they are now, the clever thing to do is go to cash.” Watling says that for risk assets (equities) that you do continue to hold there should be a skew towards defensive sectors. Watch the full interview below for more detail and the places he would not want to be invested in the current environment.
rarely do I not agree with content posted by livewire however this is rubbish, bear markets are a great time to be looking for bargains! Suggesting people need to be realising their losses in quality stocks now is counter-productive and only adds to the markets further decline, decent funds have been taking profits for some time now, building cash ready to pounce on undervalued companies in the times ahead.
Isaac, thanks for your comment and we definitely encourage differing views, thanks for making your point and explaining your position. My take on this was that Chris was not always advocating to sell in down dips but more he was pointing out that in his view there appear to be an 'abnormal' number risks at present. If you look back over the interviews we have run with Chris he has had a relatively cautious stance for some time so this was certainly not out of the blue for him. He did also refer to take a more 'defensive' stance with the risk assets that you do hold so I don't think he was suggesting full liquidation.