The bear markets of 2000\/2001 and 2007\/2009 left investors bruised and battered but not out for the count, assuming they resisted the urge to sell their stocks during these downturns and held on until the market resumed its upward trajectory. At the same time, the precipitous nature of these declines demonstrated the significant damage that a bear market can do to an investor\u2019s portfolio.<\/p>\n
With stock markets around the world turning in solid gains, for the most part, ever since the U.S. market begin recovering from its low point in 2009 (and with the more broadly-based Standard and Poor\u2019s 500 up 106% from what some cite as the start of the crisis on August 9th<\/sup>, 2007), the question on many investors\u2019 minds these days is whether another market crash is looming on the horizon. The market\u2019s powerful advance in 2017 (capped by its surge to all-time highs above the 22,000 level in August) has caused a number of prominent market pundits, including famed bond manager Jeff Gundlach<\/a><\/span><\/strong>, Seth Klarman<\/a><\/span><\/strong>, manager of one of the largest hedge funds in the U.S., and former Reagan budget director David Stockman<\/a><\/span><\/strong>, to issue warnings that the stock market could be poised for a significant decline.<\/p>\n It is true that, as the saying goes, nobody has a crystal ball. Nevertheless, it\u2019s understandable that investors concerned about a repeat of the market downturns of the 2000s might want to contact their advisors<\/a><\/span><\/strong> to see if they are taking steps to protect their portfolios if such an event were to occur. While there is no one right answer to the question of how to protect your portfolio from a crash, in the current circumstances it is certainly a relevant question to ask.<\/p>\n If a crash does happen, it is much better if you and your advisor are on the same page ahead of time, after all it is a key role of the financial advisor. Working out a strategy to deal with a crash after it has occurred is like locking the barn door after the horse has escaped; a sub-optimal approach to the situation. If you manage your money yourself, the decision as to what actions, if any, to take to protect your portfolio in case of a crash are yours alone to make. If you have hired an advisor to make such decisions, however, this by no means implies that you shouldn\u2019t learn more about the logic behind their approach. <\/a><\/span><\/strong><\/p>\n Table of Contents<\/p>\n