Making Money in a Bear Market Made Easy
Though the overall trend is growth, bear markets can sometimes make that look impossible. In late 2007, the market changed from bull to bear. By the end of 2008, the stock market has lost 40% of its previous value. Foreign markets fared worse.
For the average investor, market trends should not be a major fear factor. The worst thing you can do is panic and sell your assets when you see the market continue to fall. In fact, this is exactly what speculators want you to do and is how they make their big profits. By the time you see that the trend is downward, it is likely already near the bottom and will soon begin to rise again. If you sell at that time, you will be selling low, the opposite of investment wisdom.
A better strategy is to be prepared for these low points in the market with ready capital. This is how one can buy low. Bear markets usually offer great offers for long-term investors. You can pick up blue chip stocks for a greatly discounted rate.
Bulls and bears come and go. Nothing is permanent in the market. Learn the basics and what the different trends mean and your investment skills will improve tremendously.