Preparation

"The area was known to be an idyllic sanctuary. Snow-capped mountains, crystal clear lakes, warm summers, a gentle autumn . . . you get the picture. For nearly 180 years, Mount St. Helens remained silent, towering over the beautiful scenery below. However, there were early warning signs pointing towards a potentially catastrophic eruption of the volcano. Most viewed them as nothing more than hot air (no pun intended). Doug, a farmer who lived close to the foot of the mountain, refused to evacuate. "My mountain wouldn't do that to me," he said. Less than 24 hours later, Doug and his farm were buried beneath 70 feet of mud and volcanic debris. What's the moral of this story? 1) Even subtle signs can foreshadow a significant event; 2) Just because an event doesn't occur regularly doesn't mean it can't happen. What does the 1980 eruption of Mount St. Helens have to do with the stock market? More than you'd think . . . . When preparing for a bear market (we'll discuss in a moment why we have been preparing for a bear market), it is prudent to start early." ~Simon Maierhofer, "Should You Bear-Market Proof Your Portfolio?", Finance.Yahoo.com, July 7, 2010.