Get Ready For The Post-Bear Bounce

Boost Your Portfolio's Returns By Finding Sectors Poised For A Market Rally

about 19% from 19913 1992. During that same period, the performance of stocks in the footwear industry was up 51%; apparel, 36%; retail apparel, 70%; and personal products, 23%. Some stocks Funderburg covets include Ann Taylor (NYSE: ANN) in the apparel industry, the Costco (Nasdaq: COST) retail chain, and Avon (NYSE: AVP) in the personal products area. “In an economic downturn, you cut out the frills,” Funderburg says. “When [the economy comes] back, you purchase the frills.”

In addition to Lipper’s top rebound sector4healthcare4Funderburg believes investors should focus on insurance companies. Because of 9-11, the industry will prosper, she says, since business insurance and reinsurance will realize “a run-up in prices.” In these two areas, Funderburg favors Becton, Dickinson and Co. (NYSE: BDX), a medical equipment manufacturer, and insurer AON Corp. (NYSE: AOC), as firms that will benefit from trends in their industries.

Bagley, who seeks to retire at 50, seems as if he will heed the experts’ advice. He unequivocally plans to stay in the market for the long haul. “Historically speaking, the market over time has been the best-performing investment vehicle in the world,” he says. “Looking at my age and time horizon for retirement, there is no reason why I can’t stay in the market and ride out the bumps.” By identifying the right sectors, Bagley and others can create a smooth path to reach their financial goals. BE

Selected Sector 6-Month, 12-Monthand 36-Month Performance
After Bear Markets (1987-Present)

6 Months
Sector

Total Return
8/13/87
2/28/88

Total Return
6/30/90
12/31/90

Total Return
6/30/98
12/31/98

Total Return
3/31/00
9/30/00

Avg. 6 Mo.
Post-Bear
Bounce

Financial Services

-14.64

-13.04

-5.39

21.49

-2.90

Healthcare

-19.71

4.94

12.56

31.67

7.37

National Resources

-23.46

-5.55

-19.80

11.86

-9.24

Real Estate

-2.58

-3.49

11.52

20.20

0.65

Technology

-22.65

-14.84

27.22

-11.78

-5.51

Utilities

-5.26

1.46

10.88

9.96

4.26

12 Months
Sector

Total Return
8/31/87
8/31/88

Total Return
6/30/90
6/30/91

Total Return
6/30/98
6/30/99

Total Return
3/31/00
3/31/01

Avg. 12 Mo.
Post-Bear
Bounce

Financial Services

- 9.71

11.69

- 0.81

22.74

5.98

Healthcare

- 21.00

33.32

10.62

8.67

7.90

National Resources

- 20.93

- 4.68

2.45

10.94

- 3.06

Real Estate

- 3.01

13.46

- 6.56

27.90

7.95

Technology

- 21.78

3.18

33.75

- 23.81

- 2.17

Utilities

- 3.49

7.07

20.43

2.86

6.72

36 Months
Sector

Total Return
8/31/87
8/31/90

Total Return
6/30/90
6/30/93

Total Return
6/30/98
6/30/01

Total Return
3/31/00
3/31/03

Avg. 36 Mo.
Post-Bear
Bounce

Financial Services

- 5.15

103.93

15.61

N/A

38.13

Healthcare

29.74

47.65

63.47

N/A

46.95

National Resources

12.20

14.57

25.97

N/A

17.58

Real Estate

3.49

68.42

23.72

N/A

31.88

Technology

- 9.95

55.59

38.46

N/A

28.03

Utilities

19.79

57.30

31.26

N/A

36.12

Source: Lipper

Pages: 1 2 3 4
ACROSS THE WEB