Nobody likes to see a bear market. It creates panic in the stock world and people begin to fight back. Where fighting back is the first instinct, it can be a dangerous game. There is a practical and defensive posture you can hold, but you have to be smart about it. That is why we are here to provide you with some tactics to come out of a bear market on top.
A bear market refers to a decline in asset prices that have fallen at least 20% from recent highs. One of the first things to remember in a bear market is to remain calm. Making any sudden moves because of panic and falling prices can lead to a scary place. The best thing you can do is play dead and put larger portions of your money into money markets. Assets that have high liquidity and short maturities are the best option during a declining market.
Looking for good opportunities is also another great strategy to capitalize in the time of a bear market. The valuations of great companies get hammered down with the rest of them and this is a prime time to get your foot in the door with them. Or if you already have your foot in the door with some of the higher-end companies, now is a great time to build your position within them.
Just because you have found yourself in a bear market doesn’t mean it is entirely negative, you can make some great investment moves that will bring you great returns once the market goes back to normal. The best thing to do during times of a bear market is to keep your head straight and react calmly. You’ll come out on top!