Experienced investors know that market conditions can change quickly. A bear market—defined as a decline in stock prices of 20% or more over at least a two-month period—can occur with little warning. It’s how you prepare for a bear market that will be important to your long-term investment performance.
Give your portfolio a chance to defend itself
The best way to prepare for a bear market is to create a sound investment program—one that’s based on your time horizon, risk tolerance, and financial situation, not the market’s mood swings. If you’re not sure whether your retirement plan portfolio can defend itself against a bear market, answer these questions:
Check your portfolio
Complete Vanguard’s Investor Questionnaire at www.vanguard.com to find an investment mix that is right for you. Then compare that investment mix with your current allocation, which you can find on your account statement or online at www.vanguard.com. For a paper-based version of the questionnaire, call Vanguard Participant Services at 800-523-1188.
For more information about any fund, including investment objectives, risks, charges, and expenses, call The Vanguard Group at 800-523-1188 to obtain a prospectus. The prospectus contains this and other important information about the fund. Read and consider the prospectus information carefully before you invest. You can also download Vanguard fund prospectuses at www.vanguard.com.
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© 2008 The Vanguard Group, Inc. All rights reserved. Used with permission. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.