YOUR PORTFOLIO
Bear baiting
Bar the odd commodities play , every investment in the market currently feels like throwing money down the drain . While the financial pages of the newspapers warn you that keeping money in a cash account is guaranteed to erode the value of your wealth in real terms , investing in the market runs the additional risk of losing money in absolute terms : you may feel astute by taking advantage of a 50 % dip in the Chinese market or a US growth fund , but you are likely to feel a lot less clever when it falls another 20 % in a matter of weeks . With even the most bullish investors having doubts about equities , some are starting to look at absolute return funds instead , and it is not difficult to see why . While these come with their own set of risks , they aim to deliver positive returns in all conditions and are not dependent on the performance of the stock market for gains . Yet the best time to buy into the market is when it is at its lowest point , and while it is impossible to call this with any accuracy , dripfeeding your money in means that you will be able to take advantage of lower prices if the market falls . This raises the question : is it better to invest a lump sum into an absolute return fund as we enter a bear market , or drip-feed money into equities to take advantage of depressed prices ?
Keep your eye on the prize Simon Edelsten , co-manager of the Artemis Global Select fund , says buying equities when markets are likely to go down seems like a daft idea , yet the end of a bear market often arrives suddenly and it is difficult to time your re-entry for the next bull phase . “ How many people would claim to
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