Contrary to popular belief, bull markets do not last forever. Now we have seen in the past when markets reach that there is a 20% fall, which is usually the way it is a 30% drop overall. And markets can take up to two years on average. That is bad news. The good news is that bear markets also get closer and there are things you can do to protect yourself during a bear market decline. And in fact, even when this is happening, make some money now. The most important thing, lesson number one: Don’t panic. This is the worst thing you can do is the bottom of the market. Cash, for the first time in a decade, gives you some returns. The three-month Treasury note is actually a yield now. So does the money market. So is a plain vanilla savings account. So what is the benefit of raising cash during this time? So you have opportunities later. You can buy things that are on sale during a bear market and make some great investments for value. Do you want to talk about price? Let’s talk about Warren Buffett. Back in 2009, when everyone was panicking, Buffett made a large investment in the Burlington Northern Santa Fe Railroad. And I just basically believe that this country will prosper and they will have 10 and 20 and 30 years more cargo to carry from now on. And rail should benefit but it is basically a bet on the country. He then believed in America. And they also believed that the bear market was going to end and when it was over there was going to be an opportunity to bounce back and make money. The stakes played in one of the best parts of Warren Buffett’s career. He has earned a ton of money over that in the last decade. Buffett’s philosophy can only be expressed in the pursuit of value during bad times and confident that things are going to come back again. Remember what Buffett says: “When others are greedy get scared and frightened.” Think about safe places during these times. Short-term bonds, commodities like gold and silver. They are all traditional places where investors will invest their money for protection in times of financial market turmoil. If you are going to dub stocks then keep some things in mind. High dividend stocks are an excellent place to invest money. Why? Because you are paying to hold them. Favorite shares along similar lines as well. And if something happens to the company you paid for. In a bear market people are tightening their belts, so think where they are going. They are going to a discount store. They are going to Walmart. They are going to Dollar General. Walmart valued it when the rest of the market was falling during the crisis. Why? This is why during that time people were shopping and investors were rewarded for it. Real estate can also be a solid investment during these times. Yes, prices may go down, but they have shown less volatility over time. Furthermore, it is good to know that even if it is not appreciated, you can actually live there. Remember, it is not just the US stock market. It is a global stock market and over the years, global stocks have beaten quite badly. So this is going to provide you an opportunity that you can get there at cheaper prices also. No one knows how long a bear market can last or how strong it can be, but there are ways for you as an investor to work your way through it.
How To Invest In A Bear Market