Three Ways to Invest

We offer three ways to invest with Bull Bear Investment Management, depending on your performance goals, timeline, and volatility tolerance: 

1.    Lower Volatility, Lower Return:  In this strategy we aim to perform about half as well as the S&P 500.  We invest in stock indices and income producing assets, such as preferred stocks. This strategy limits volatility and downside risk, and obviously also limits upside gains. 

2.    Moderate Volatility, Moderate Performance:  In this approach we aim to perform about as well as the S&P 500. We can say this because we invest heavily in the S&P 500 index, rather than picking individual stocks. 

Why no individual stocks?  Extensive research has repeatedly shown that most money managers who pick individual stocks, and most mutual fund managers who pick individual stocks, and most hedge fund managers who pick individual stocks, do not match the gains of the S&P 500.  That includes some of the biggest names in investing, like Warren Buffett, who don’t come close to keeping up with the overall stock market.  For example, in the 10 years since June 2012, the S&P 500 rose 232% while Buffett was up only 144%.

The other reason we like the S&P 500 is that it is one of the safest stock investments you can make.  The S&P index is highly diversified, representing 500 very well-established blue chip stocks across a broad range of industries, creating even greater diversity.  The S&P 500 has everything a wise investor would want in a stock investment.  In fact, you’d be hard pressed to find a safer stock market investment available today.

3.    Higher Volatility, Higher Performance:  In this strategy we aim to perform about 50% better than the S&P 500.  We can say this because we invest a portion of the portfolio in amplified (leveraged) S&P 500 stock index ETFs to reliably achieve the additional performance. 

There is a tendency to assume that using leverage is always risky.  However, not all leverage is created equally.  Using leveraged stock index ETFs is much safer than using margin.  And because these ETFs track the movement of the S&P 500 index almost exactly, all the safety attributes we just described above, regarding the S&P 500 index, apply fully to the leveraged S&P ETFs as well.

The only difference is that these ETFs perform better than the S&P due to leverage.  That means their value will go up more than the S&P when the S&P rises and go down more than the S&P when the S&P falls.  This is very definition of higher volatility and greater performance – but without greater long term risk.

As the S&P 500 continues to generally rise, which it certainly has since 2009, leveraged ETFs will also gain overall, only more so.  On the other hand, if the S&P 500 generally falls over a multi-year period, you would not want to be in EITHER leveraged OR unleveraged S&P 500 ETFs.  In fact, you should not be in the stock market at all.

Performance While the Market Generally Rises, Our Fierce Protection Later When You Will Need it the Most

Unlike most money managers, we think that a big long-term decline in the S&P 500 is a real possibility when the Fed loses control over rising interest rates due to future inflation caused by massive money printing. 

Because we are expecting this to eventually occur, we are fully prepared to exit all interest-rate-sensitive assets, such as stock and bonds, and move to non-interest-rate-sensitive assets, such as gold and gold equivalents, which at that time will do quite well.

Typical money managers will simply move a little of your stocks into bonds in a feeble attempt to protect you.  That will be entirely inadequate to protect you from the potentially huge losses that both stocks and bonds will face in a rising inflation and interest rate environment that the Fed can no longer control.

With Bull Bear, you get both potentially higher returns in the medium term and greater protection from potentially huge losses if and when the Fed loses control over interest rates in the longer term.

With any of our three volatility/performance levels described above, you benefit from the potential long-term gains and risk protection of our investment strategy.  The primary difference is simply the level of volatility you are comfortable with as we pursue our core strategy:  Ride the Bull now, dodge the Bear later.

As you would expect, lower volatility also comes with lower performance. There is no free lunch. You simply have to pick the level of performance and volatility that best suits your needs and comfort level.  And we are happy to help you with that.  Click to HERE to schedule a call to discuss your options.