It’s Not Bearish To Respect The Road Ahead

Last year, I wrote an article to share why being called a “perma-bear” is actually one of the best compliments I can get. To me, it means I’m paying attention to risk, preparing for difficult conditions, and doing my best to help investors avoid the kind of financial pain I went through years ago.

And the truth is, though it may seem otherwise at times, I am not permanently bearish.

What I really am is a defensive driver in the markets.

Most of us remember what it felt like to learn how to drive, or at least what it felt like to sit beside someone who was still learning. The hands locked on the wheel. The braking that came a little too late. The overcorrection after drifting slightly out of the lane. The constant reminders from the instructor or parent sitting beside you: check your mirrors, keep both hands on the wheel, use your signals, leave enough room, and pay attention to what is happening around you.

At the time, many of those rules can feel repetitive. I still remember learning to merge onto the highway and noticing my dad gripping the door handle a little tighter than usual. I did not fully understand why every little habit mattered. I just knew I was supposed to follow the checklist.

But after enough miles on the road, those lessons start to make sense.

The Market Is Always Changing Conditions

Checking the mirror is not just about passing the driving test. It helps you spot the distracted driver about to cut you off. Leaving extra space is not just about following rules. It is what gives you time to react when the car ahead suddenly hits the brakes. Slowing down in bad weather is not fear. It is awareness.

That is what defensive driving really is.

It is not refusing to drive. It is not being afraid of the road. It is not pulling over every time conditions become less than perfect.

A defensive driver still gets on the highway. A defensive driver still makes progress. A defensive driver still passes when conditions allow, takes the open lane when it makes sense, and continues toward the destination.

The difference is that a defensive driver respects changing conditions.

Traffic changes. Weather changes. Visibility changes. Road surfaces change. Other drivers behave unpredictably. And because those things change, a good driver adjusts.

That is exactly how I have learned to think about the markets.

When people call me bearish because I pay attention to risk, I understand where that comes from. I talk about risk often because I have lived through what happens when risk is ignored. I know what it feels like to be blindsided. I know what it feels like to watch losses accelerate and realize the damage is not just financial. It affects confidence, decision-making, sleep, and the time required to recover.

But paying attention to risk does not mean I am always bearish.

It means I understand that the market, like the road, does not stay in one condition forever.

There are times when the road is clear, visibility is good, and conditions support steady progress. There are times when traffic builds, hazards increase, and it makes sense to slow down. There are times when the road becomes dangerous enough that continuing at full speed is no longer responsible.

What Defensive Driving Looks Like In The Markets

The Asset Revesting philosophy begins with that same idea.

Markets change, and capital should not be managed as though every environment is the same. The goal is not to predict every turn, avoid every pothole, or drive with fear. The goal is to protect both capital and the years ahead by adjusting exposure when conditions change.

Investors have often been given two basic choices. One is buy-and-hold, which can feel like setting the cruise control and staying the same course no matter how traffic, weather, or road conditions change. The other is active trading, which can feel like constantly changing lanes, reacting to every slowdown, and trying to beat traffic moment by moment.

Asset Revesting sits between those extremes. It is not about ignoring the road, nor about overreacting to every movement around you. It is about having a disciplined process that adjusts as conditions change while still keeping the destination in mind.

At The Technical Traders, the Adaptive Compounding Strategy (ACS) is one rules-based strategy we use to apply that philosophy. Asset Revesting is the belief system. ACS is the process.

Through ACS, we evaluate market conditions and adjust exposure based on what the evidence is showing. When conditions are favorable, participation has a role. When conditions weaken, risk deserves more respect. When the environment is unclear or unfavorable, holding cash or becoming more defensive can be part of the discipline.

This is where the driving analogy fits so well.

A reckless driver may look confident because they keep pressing the gas no matter what happens. But confidence is not the same as awareness. A reckless driver can make good time for a while, especially when conditions are easy. The problem comes when the road changes and they refuse to adjust.

A defensive driver may not look as exciting, but the goal is different. The goal is not to make the drive thrilling. The goal is to get to the destination safely, with the passengers, the vehicle, and the purpose of the trip intact.

That matters even more when other people are counting on you.

When I follow rules, anticipate risks, and leave a buffer between members and major losses, I am not just thinking about market performance. I am thinking about the people who rely on the process. I am thinking about the retiree who does not want to watch years of progress disappear. I am thinking about the investor who has already worked decades to build capital and wants to protect the life that capital is meant to support.

That responsibility matters to me.

The market, like the road, moves through different conditions. As part of the rules-based process we use within ACS, we evaluate those conditions through stages.

Stage 1 is basing, which can feel like waiting at a red light. The car is not moving quickly, but patience matters because the next move has not yet fully developed.

Stage 2 is advancing, similar to cruising down a clear highway. This is when conditions are more favorable, participation can increase, and compounding has room to work.

Stage 3 is topping, which can feel like driving into fog. Visibility starts to drop, conditions become less clear, and risk can begin building beneath the surface before it becomes obvious.

Stage 4 is decline, which is more like hitting black ice. The road may look manageable at first, but once traction is lost, damage can happen quickly. If a driver has not already slowed down, created space, or prepared for the conditions, the outcome can become much harder to control.

A reckless driver presses the gas through every condition.

A defensive driver adjusts.

That is what we are trying to do with ACS. It is not about being bearish. It is not about trying to make the market exciting. It is about having a process that helps determine when to accelerate, when to ease off, when to move toward cash, and when to shift toward assets built for rougher roads.

Why The Destination Matters More Than The Speed

One member captured this well when he said, “I love the strategy and it allows me to check in once a day and not be glued to the charts… the money I’m making lets me get my adrenaline from traveling, not trading.”

Another member put it even more directly: “Being 68 years old I can’t take the stress that comes with big dips in the market. I have total peace with the ACS portfolio as I am more concerned about the return of my money than having huge home run returns on my money.”

Those comments matter to me because they are not just about returns.

They are about the experience of investing. They are about having a process that allows someone to live with less stress, less constant watching, and less emotional dependence on every market move.

That is the destination most people really care about.

The goal of investing is not to make the trip exciting or to show off speed. The goal is to arrive with more than you started with, and with the time, flexibility, and confidence to enjoy what the money was meant to support.

Because at the end of the day, it is not just about the drive itself.

It is about what waits at the destination: time with family, the ability to travel, financial flexibility, and the chance to enjoy retirement without feeling controlled by every turn in the market.

The Goal Is To Arrive With More Than Money

So if someone wants to call me a perma-bear because I pay attention to risk, I can live with that.

But the truth is, I am not bearish by nature. I am a defensive driver.

I want to participate when the road is clear, slow down when visibility drops, and protect the people trusting the process to help them reach the destination they worked so hard for.

Because investing is not only about surviving the road.

It is about protecting the life waiting at the end of it.

Chris Vermeulen
Chief Investment Officer
TheTechnicalTraders.com

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