The defensive investor should allocate his portfolio into a 50-50% division between stocks and bonds. And adjust the ratio according to his due deligence analysis depending of whether he is bullish(25% bonds 75%equities) or bearish(75%bonds 25%equities). This would allow him to reap greater profits in a bull market, while maintaining a margin of safety in a bearish market. The basic rationale is no investor can consistently guess the market direction correctly, and hence the normal investor has to properly protect his portfolio while ensuring satisfactory returns in all markets.
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