Bear Market Rallies

Alan Abelson, who writes a column for Barron’s, states in last week’s edition that during the 2000-02 bear market, there were no fewer than 16 rallies of at least 5% in the S&P 500, each lasting on average about a month, and no fewer than 35 bounces of 5% or more in the NASDAQ, which still managed to wind up losing nearly 80% of its value. In other words, this bear market is not over yet. Therefore, your investment mentality should be the mirror image of what it was during the bull ride from 2003-08. That is, sell the rallies.