Ask Colin

What is an appropriate exposure to the share market now (November 2002)?

There is a wide range of appropriate answers to what exposure you should have at any one time. I abhor cast iron rules, because it is important to be flexible and to realise that every situation is subtly different.

In general terms, I will be 100% cash in a bear market. However, as it draws to a close, I will start to build my exposure. At present, I am about 25% invested, but this could swing back to 100% cash if the market turns down again.

However, that does not mean that my level will be suitable for you, because it depends on the other elements in your trading plan. A trading plan is an integrated statement of strategy and tactics dealing with risk, so each element cannot be taken in isolation.