In Aesop’s fable, The Ant and the Grasshopper, the ant gathers food all summer long in order to prepare for the winter, while the grasshopper spends his time enjoying the good fortunes of the season. When winter comes, the grasshopper has no food and is unable to survive. Meanwhile, the ant is able to live on all of the grain he has collected. The moral of the story? “It’s best to be prepared for the days of necessity.”

The markets have been very generous, giving investors double-digit returns for most of the nineties. However, just as seasons change, one day, the good fortunes of the market will also change. I’m not trying to predict what the markets will do in the future. Nor am I trying to make a call on the next correction or bear market. The point is that one day the bear will come, and those who have prepared for it will survive the “days of necessity.”

The rest of this article is dedicated to giving you conservative strategies for investing your money so as to protect your assets when markets get rocky:

1. Diversification through prudent asset allocation. It has been said that asset allocation represents over 90% of your investment return. In fact, proper allocation of investments can give you better returns over time without taking unnecessary risks. Be sure to take the time to develop your mix of investments, based on your personality, investment needs, risk tolerance, and age.
2. The Indexed GIC. Indexed GICs are the new craze for conservative investors looking for higher returns without losing the comforts of capital guarantees. All indexed GICs are different so be aware of the underlying market index, the minimum guarantee, and the participation levels.
3. Dollar-Cost Averaging to chase a Bear. Dollar-cost averaging, which is simply a systematic form of investing, has the perception of being an accumulation strategy to build investments while you are younger. It is also, however, a great tool for experienced investors to invest lump sums of money in order to protect against buying at the wrong time.
4. Look for Guaranteed Investment Funds. The insurance industry offers mutual fund type investments with guarantees of capital at death or maturity of the contract. Now, you can get brand name mutual funds with guarantees of capital and growth. Do your homework, as products can differ greatly, especially with respect to the guarantees.
5. Maintain perspective about time. Another one of the great principles of investing is long term investing. Some of the greatest managers like Sir John Templeton and Warren Buffet believe that the best time to buy a stock is when you have money and the best time to sell is never. Certainly, studies show that over time, the risk of investing is reduced drastically. Given time, any drops in the markets look less significant. Keep perspective and stay invested. Simply use logic instead of emotion when panic sets in.