Planning with the Bulls & Bears Investment Philosophies for the New Millennium and Beyond So what did we learn about investing through one of the most prolific bear markets ever experienced? That diversification, reallocation and utilizing sophisticated risk tolerance testing is the best that we can do? That we should stay invested and ride the volatility up and down because we can't time the markets? Can we succeed by taking "somewhat" educated guesses? Did dollar cost averaging alone work for you? Where did the classic "Buy and Hold" strategy get you? These are the questions that you should be being asking yourself and your current financial advisor.What I've learned is that to manage our assets properly we need to have a sound strategy, stick to it, and to manage it without guesswork or emotion, on a day-to-day basis. Treat your investments as a non-emotional item; don't fall in love with them. In other words, treat them like a business; the decisions you make will have a profound effect on what type of financial life you will lead.I'm often asked what the best investment today is. The answer is: "It depends!" To find out we must begin with the basics. These questions must be answered before we can determine where to make an investment*.What is this investment's purpose?What is this investment's time horizon?What about your individual risk tolerance?Now we are again back to what are the best opportunities in today's market climate and cycle? No one truly knows what the markets will do tomorrow, the next day, or even the next week, month or year!!!With that being said, what choices do we have? Let's take a look at two opportunities that make sense at this time.Daily Active Managed Accounts*Variable Annuities* Daily Active Managed Accounts* Essentially what we are doing is attempting to cut the tops and bottoms off the market cycles in an effort to attain positive returns during both bull & bear market returns - of course there can be no guarantee that positive returns can be achieved over any time period. Utilizing this particular strategy we strive to remove the guesswork and emotion that takes over a lot of investor's mindsets during volatile market cycles. Using a football analogy, we must look to score a series of first downs before we score a touchdown. We all love the long play or score but how realistic is that really? If we score enough first downs we usually win the game and that is what we're trying to do, correct? And let's not forget about what part the defense plays! Remember what the experts say "defense wins championships." Again, to manage our assets properly we need to have a sound strategy, stick to it, and manage it without guesswork or emotion, on a day-to-day basis.Sounds great, but how do we pursue that?First we must establish a loss limit. How much are we willing to lose before moving to the sidelines (let's say money market)? We must let the markets dictate when we're in the game, not irrational emotion or guesswork. There is no use in hoping that things will be all right, correct? Once we have established our loss limits then we'll keep that same percentage while the markets raise so that when the markets retreat we'll know when to move to the sidelines and be able to hold on to some of the potential profits versus giving some or all of the potential profits back if you were to utilize the traditional buy and hold strategy.In a Bull Market:A hypothetical example would look like this: We buy at a market value of $10 a share. We'll use a 10% factor (although our factors are different, depending on the specific investment) so if the market immediately declined we would sell at $9, ($10 - (10%) $1 = $9). If the markets increased, (bullmarkets) then we would hold the asset but continue to raise our sell price. $15 - (10%) $1.5 = $13.5 sell price. We would hold on to a 3.5% gain. Again, this is only a hypothetical example.In a Bear Market:We utilize a short position as the markets decline with 50% of our assets during declining bear markets, the balance would be on the "sidelines" in money market or short term government bond funds, waiting for the next potential bull market rally.Again, essentially what we are doing is striving to cut the tops and bottoms off the market cycles. We must remember that there is still risk involved, but knowing that we have a system in place that takes the guess-work and emotion out of the decision when to be in or out of the markets, we allow ourselves a better chance of being positive after longer term market cycles.We're all presented with options and decisions we must make on a day-to-day basis. It's what we do with those options and what choices that will determine how our lives are lived. We have to educate ourselves so that we can make sound decisions, especially when it comes to our finances. What type of retirement do you envision for yourself and loved ones? Maybe now is the right time to educate yourself with some additional options within the investment world. Schedule an appointment with your current financial advisor or with Bull & Bear Financial Outfitters, "guide to your financial freedom" to determine if any of these investments have a place within your financial plan*.PLEASE REMEMBER THAT NOT ALL INVESTMENTS ARE SUITED TO ALL INVESTORS. You still need to be diversified depending on what your asset base is and what goals you are trying to accomplish within a given time line.