What Are The Ways To Survive In A Bear Market

by Anna Rose Blogger

After a bull market persists for long, it might be time for a bear market to arrive. But it can be confusing enough as you are not sure how long the market will stay. Also, it may be unknown how the market will impact the prices of the stock market. When the entitled market is about to come, you may not know whether you can survive it or profit from it. Some by following some strategies and tips, you can make some money. Even if you cannot make money, you can reduce the chances of loss of your investment portfolio.

A market indicates the condition when stock prices are falling. The selling in the stock market might vary depending on what the investors anticipate about losses in the market. As stock prices start to fall, it might be difficult to assume whether it will be a 5% to 10% correction or it would decline below the normal level in the market. On the other hand, if you keep waiting for the stock prices to rise, you may lose a good opportunity to make a profit from the prevailing market conditions. Therefore, you can follow strategies that shall help you overcome the upcoming market condition.

How To Make A Profit By Buying Index Funds?

By studying the condition of the market well, you get to know that when you buy index funds in regular intervals, you are sure to prosper when it is time for the above-said market. There are people who without even knowing the condition of the upcoming market have bought index funds. But if the market conditions become good, you are sure to make a profit from the index funds. To avoid any sudden loss in the market, it is recommended to invest in a small amount at frequent intervals.

Why Buy Short And Long Term Puts?

If you think that the market is developing with plenty of options to make a profit from it, you can start to get both short term and long term puts. With put, you get access to rights for 100 shares. Even if you are buying puts, you should check the margin requirements properly.

In this regard, you can try selling ‘naked’ puts to others for cash premiums. So, you have to be careful and plan strategically when selling put contract in a bear market.

However, apart from the above-said tips, you can try to find assets that rise in price. By researching the past condition of the market, you can grasp better insight into the stocks or assets that stood strong in their position even when the market was suffering a terrible economic crisis. However, a different sector of the market might get affected differently. So, you have to be careful enough to survive in the above-said market.