Newspaper Page Text
Financial
Focus
Reported by Sonny Doehring
Lessons from a Bear Market
If you invest for many years, you’ll
eventually encounter both bull and
bear markets. Although you obviously
prefer seeing the bull, you may actually
learn more from the bear - and when
it’s “hibernating,” you can put these
lessons to good use in making invest
ment moves for the future.
Here are some of the key “bear mar
ket lessons” to consider:
• Purchase quality investments. A
bear market tends to drag everything
down with it. But quality investments
- those with strong fundamentals and
good prospects - have the potential
to bounce back quickly once the bear
market ends. That’s why you’ll want to
consider owning these quality vehicles
in all investment climates. In fact,
try to avoid owning investments today
that you wouldn’t want to own in a
bear market tomorrow.
• Maintain realistic expectations.
Many investors look back fondly at the
mid-to-late 1990s, when we frequently
experienced double-digit stock market
returns. Unfortunately, these results
“raised the bar” in terms of what
investors expect - and these elevated
expectations led to problems for people
whose long-term financial goals were
based on overly optimistic projections.
By anticipating more modest returns,
you’ll be able to set more realistic,
achievable goals. At the same time,
don’t be surprised at the recurrence of
bear markets, which are a normal part
of the investing process.
• Know your risk tolerance. If you
find yourself losing sleep over the fate
of your investments in the midst of a
bear market, you may need to review
your risk tolerance and adjust your
portfolio accordingly. But keep things
in perspective. Instead of fretting over
daily or monthly downturns, ask your
self this: “How much can I afford to
lose and still meet my financial goals,
such as achieving a comfortable retire
ment?” You’ll come up with different
answers at different stages of your life.
• Base investment decisions on
principles - not predictions. Every
body can make investment predictions
- and they usually do. But many of
these prognosticators have poor track
records. So, instead of acting on predic
tions, base your investment decisions
on principles, such as buying quality
investments, maintaining a long-term
perspective and diversifying your port
folio. While diversification can’t guar
antee a profit or protect against a loss,
it can help reduce risk when the mar
ket is volatile.
• Maintain adequate liquidity. If
you are planning on cashing out a long
term investment to pay for a major
expense, such as a down payment on
a home or college tuition for a child,
you could run into difficulty if a bear
market is raging and the value of your
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THE ISLANDER, SEPTEMBER 28, 2009, PAGE 3
Business Upda
Georgia Pacific earns SFI® President’s Award
Georgia-Pacific LLC has been rec
ognized for its outstanding efforts in
increasing understanding of the Sus
tainable Forestry Initiative® (SFI®)
fiber sourcing program and how it sup
ports family forest owners across North
America.
“The SFI program values the crucial
role all forest landowners play in man
aging our forests, and demonstrates
this through our unique fiber sourcing
certification,” Kathy Abusow, president
and CEO of SFI Inc., said.
Sixty percent of the fiber in forest
products manufactured in the United
States comes from the 10 million fam-
investments have dropped. To avoid
this problem, maintain a portion of
your portfolio in liquid investments.
Although these vehicles won’t provide
you with a high return, they offer great
er preservation of principal - which is
just what you need when you need the
money now.
• Look for good investment oppor
tunities. During a bear market, you
can almost always find quality invest
ments. While their prices may be down,
these investments can still offer good
growth potential and typically, the best
time to buy them is when their value is
down.
By following these lessons, you can
prepare yourself for a bear market - and
help avoid getting “clawed” by it. □
ily-owned forests in the country, and
most are not certified. Under SFI fiber
sourcing certification, companies like
Georgia-Pacific must have an auditable
procurement process for fiber they buy
from these lands and encourage land-
owners to reforest areas that have been
harvested; use best management prac
tices to protect water quality; identify
and protect important habitat elements
for wildlife, including critically imper
iled and imperiled species and commu
nities; and use the services of qualified
resource and logging professionals.
“North America depends on fam
ily forest owners who are dedicated to
responsible forest management,” said
Deborah B. Baker, Georgia-Pacific’s
vice president - sustainable forestry.
“Georgia-Pacific may not own forest
lands but we can have a positive influ
ence on thousands of acres through the
SFI program.”
Georgia-Pacific conducts extensive
SFI outreach. Georgia-Pacific also
works with its customers to promote the
SFI fiber sourcing certification. During
Earth Month, it worked with Walmart
to create special packaging for copy
paper that featured information about
SFI fiber sourcing certification that is
still being used. The company has also
produced printed and video materials
explaining how SFI fiber sourcing posi
tively impacts the U.S. fiber supply and
the health of forests. □
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