Jonathan over at MyMoneyBlog shared some good weekend reading on suriving a bear market. He also uses a neat trick of taking 0% APR credit cards to put money into high yield savings accounts. His blog is an interesting daily read and Survive  A Bear recommends it.

Judy Alster over at rightside advisors wrote a good article on how dividends can take some of the sting out of this bear market. Some interesting points:

Some of your investments should be giving you reasonably reliable returns that don’t require you to be constantly monitoring your holdings — investments that will, in fact, pay you just for showing up. Dividends are how a company signals steady operating cash flow and legitimately returns earnings to its owners.

and

When you buy a dividend-paying stock, you get periodic payments and your portfolio gets some insulation against a falling market. Over the last 12 months the S&P 500 index has declined over 37%; in the same period the Mergent Dividend Achievers Index (DAA) has declined 31.5%, the PowerShares Dividend Achievers ETF (PFM) is down 30% and some high-yield dividend indexes are down even more. The 21st Century Investor Dividend Portfolio is down 21%.

Survive-a-Bear’s take on this is that you can use the dividends to purchase discounted growth equities now while the price is low, without having to put additional cash into the volatile market.

Yesterday’s rally might have given you a bit of false confidence. Keep in mind that large rallys are nothing new to historical bear markets.

http://www.usnews.com/blogs/the-ticker/2008/10/29/what-matters-to-stocks-hint-its-not-the-fed.html

Here’s a classic mistake being made by average non-pro investors in this market: Actively trading. Survival in this market is going to mean diversifying across several asset classes with broad market index funds and sitting tight. If you are investing for the long-term 10, 20, or 30+ years this is THE strategy to use. If you need your money within 6 years, say for retirement, you really should pull out of the stock market.

And just in case you think that picking companies with “good governance” will be a surviving strategy, start here, you may be surprised.

What is the one thing that legendary the investors get, but ordinary investors don’t? That bear markets are a good thing.

Back in May at Berkshire Hathaway’s annual meeting, legendary investor Warren Buffett opined “I would offer you a significant sum of money if you could give me the opportunity for all of my stocks to go down 50% over the next month.” Buffett believes in the companies he invests in, and would welcome the opportunity to buy them at a discount.

Everyone knows the saying “buy low and sell high”, but you are never going to complete this equation if you are afraid to buy when the market is low. Maybe these numbers will alleviate some of your fears: Historically bear markets return gains of 5.6% annually. In the long term, that still beats or is close to beating the traditionally more conservative investments like bonds. But here are the real numbers you can’t afford to overlook: Following the last long bear market of 1969 to 1982 was an 18 year bull market that returned 18.5% annually.

Will you be an ordinary investor who gets scared into pulling out of stocks now, thus buying high and selling low, or will you follow the foot steps of the legendary investors and look long term with a mantra of “price versus value?”

It’s not your imagination: This bear is a mean one writes Tom Petruno, the Los Angeles Times financial markets blogger. He is right. The S&P 500 closed down 36.3% from its high one year ago. Although the duration of this current bear is still below average, the percentage drop is in the top 5 of the worst bear markets since Standard & Poor has been measuring them. So what does one do? Well considering October has been a historical “bear slayer”, now could be a great time to move in.

Forbes.com has a nice “In Pictures” slide show feature detailing five bear market hedges and their results. It is an interesting look at some investment categories that can help you survive the next bear market.

We all know that it is just a matter of time until the next bear market. Some analysts expect it to come sooner rather than later. Either way, the smart investor has a strategy in place to not only survive the coming bear market, but capitalize on it. Rex Moore of the Motley Fool lays out one such great strategy.

Is this the start of a bear market? Last weeks sell-offs may indicate a investor confidence beginning to shake reports Jeremy Peters of the New York Tmes. Bear markets generally don’t happen immediately following record highs, so we won’t hold our breath…yet.