Investors?? Bear and bull fund question.

Question

What do you think? I was thinking about buying a bear fund and a bull fund and investing an equal amount of money in both until the market picks back up and then consolidating all of my money from the bear into the bull. Would you advise this? And if so which funds are good?

Answer 1

It looks like you are giving a lot of credence to your ability to time the market. Moreover, by initially splitting your money equally between bear and bull fund you would be betting on your ability to select the best funds in both worlds. There is a very high probability that in this scenario your returns from the two funds will cancel each other and then considering the fees to invest in these funds, you will most probably be better off staying in cash until the 'market picks up' (i.e. again assuming your ability to time the market.

I am more of a value investor and invest from a long term perspective (have absolutely no ability to time the market!). So my advice would be to look for managers that have historically out performed and look at their investment strategy. Ignore, the short-term performance - especially over the last year.

Some of the good fund managers in this realm are: Dodge and Cox, Long Leaf, Sequoia, Pzena.