How Do You Make Money In A Bear Market?
A bear market exists when equity prices are down 20 percent or more from their highs. Bear markets often result in investors losing a lot of money, but a few simple techniques can enable you to not only survive the storm, but make a lot of money. How to Make Money in a Bear Market Step 1 Recognize that you’re in a bear market. The market will be down at least 20 percent from its highs. Technical chart patterns will have distinctively bearish formations, marked by lower highs and lower lows. Prices that had previously supported market declines will be broken through and new lows established on a daily or weekly basis. Step 2 Sell stocks short. Shorting a stock involves borrowing shares from your brokerage firm and selling them to a third party in anticipation of a price decline. Once the price has declined as far as you think it will, buy back the shares you sold short and close the position. You should only short companies you think will decline the furthest in a bear market. For insta
