Bear Course Quiz 2

Choose the best answer from the available choices. One response must be selected for each question.

Which of the following is the most practical approach to navigating bear markets?

Take a best guess as to when the market has topped out, sell all of your positions and move everything to cash.

The market always bounces back, so why should I worry about it?

Prepare - with a plan based on a systemic rule base that has been tested to work.

Wait for the market to turn and then sell all of your growth positions and short the market with all of your capital.

When the overall market environment changes, what is necessary to develop an effective strategy to successfully interact with the new market conditions?

A mindset of adaptability, combined with preparation for any outcome.

Cutting edge technological tools.

The right information at the right time.

All of the above are correct.

In a bear market, is it best to hold on to the assets you already own and wait for the dust to settle, or to adjust what you are doing?

Making adjustments in a bear market is best. It is a dynamic environment that behaves differently than growing markets, and that requires us to adapt our approach to manage risk and peace of mind.

Buy and hold is the only way to go. It'll come back eventually.

I've weathered natural disasters by bunkering in place, so I think my assets can absorb a few blows and still survive.

If the people on the financial news aren't worried, I shouldn't be either because they have a fiduciary responsibility to tell me the right thing to do with my assets.

Which of the following is a major benefit of sidelining your growth strategy during bear conditions?

My grandparents never sidelined anything. They would just grin and bear it the traditional way, and they survived.

I have the opportunity to let a portion of my account sit in cash, gaining purchasing power as other prices plummet, and put the rest to work in the ways that are best for my personal circumstances.

As others around you hold on tight to their positions and worry about how low the market is going to go, you get to sit back and watch the market without stressing because you know your money is somewhere safe.

Both the second and third choices are major benefits of sidelining my growth strategy during bear conditions.

Which of the following best describes an advanced financial instrument designed to gain value in falling bear markets?

All exchange traded funds (ETF) make money while the market's on the way down.

Inverse ETFs are purposefully designed to earn profits while the overall market is declining.

Time Travel Funds (TTF) are the only way to profit in bear markets, because going backwards in time lets you retroactively sell at the exact top of the market and avoid the bear.

Head to the nearest market and buy salmon, berries, and bear spray. It's supply and demand 101.

How important is it to know the detailed inner-workings of advanced financial instruments used in bear markets?

The nitty-gritty details of an instrument that works are less important than knowing how and when to use them effectively.

It's never important to know what you're doing or how things work.

Advanced instruments are for professional working on Wall Street only. It doesn't matter how simple the tool is, it's wrong to use it unless you work for a big firm.

The devil is in the details. Knowing everything inside and out is of the utmost importance to being effective in the market