How do you demonstrate assertive behavior when bullied?

I find that being witty and sarcastically self deprecating works best. For example, if someone were to say "Heard you did some gay stuff this weekend". Act nonchalantly and say something like, "Wow, that got around fast" Most people already see them for who they are and know you are joking when you respond like that. Trying to fight back physically or verbally is just what they want you to do and it usually doesn't help. The reason that they are attacking you is that they are unhappy with themselves.