How To Profit In A Bear Market
To make a long story short, the answer is yes, but as in many cases it should be followed by "if you know what you're doing".
There's no way to predict what direction the stock market will be taking on a given day. Because of this short-term volatility, it's easy to see why understanding the basics of the stock market is key to success. The past couple of years have certainly not brought about good news, but as usual, where some people lose, others profit.
Just like every other market, there are "sales" in the stock market, and those sales are known as bear markets. Because of different reasons, people want to sell their investments, and that creates a pressure on stock prices, which go down. This is where the opportunities present themselves.
Naturally, stock prices that are going down are not good news for people who are heavily invested in the falling securities, but it's an opportunity for those that are not, provided that the company's fundamentals are solid. A little "out of the box thinking" can yield sizable profits.
The financial sector has taken the brunt of the hit in this crisis, and has dragged down other sectors as well. But that doesn't mean that all sectors are doing badly. Some companies have solid fundamentals and continue to be profitable. You're going to have to do your research in order to find those gems and buy them.
If you don't learn about the basics of the stock market, you won't be able to look at the company you're interested in, analyze its financial statements, and determine whether or not its stock is down because of the general state of the economy or because the company's performing poorly.
When you find companies whose financial performance is solid, are well-run, and are turning profits near or at their usual levels, you need to buy them even if most people out there are selling them. Doing so gives you a great chance of seeing great returns in the years to come, when the downward spiral comes to an end.
There's no way to predict what direction the stock market will be taking on a given day. Because of this short-term volatility, it's easy to see why understanding the basics of the stock market is key to success. The past couple of years have certainly not brought about good news, but as usual, where some people lose, others profit.
Just like every other market, there are "sales" in the stock market, and those sales are known as bear markets. Because of different reasons, people want to sell their investments, and that creates a pressure on stock prices, which go down. This is where the opportunities present themselves.
Naturally, stock prices that are going down are not good news for people who are heavily invested in the falling securities, but it's an opportunity for those that are not, provided that the company's fundamentals are solid. A little "out of the box thinking" can yield sizable profits.
The financial sector has taken the brunt of the hit in this crisis, and has dragged down other sectors as well. But that doesn't mean that all sectors are doing badly. Some companies have solid fundamentals and continue to be profitable. You're going to have to do your research in order to find those gems and buy them.
If you don't learn about the basics of the stock market, you won't be able to look at the company you're interested in, analyze its financial statements, and determine whether or not its stock is down because of the general state of the economy or because the company's performing poorly.
When you find companies whose financial performance is solid, are well-run, and are turning profits near or at their usual levels, you need to buy them even if most people out there are selling them. Doing so gives you a great chance of seeing great returns in the years to come, when the downward spiral comes to an end.
About the Author:
Carlton Hughes is a retired financial planner and has been involved in the stock market for over 35 years. He regularly writes on several financial sites like Make Money In The Stock Market and his own personal finance blog, Personal Finance 411.
posted by Debt Consolidation Loan at
11:17 AM
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