Describe the best "Bear Market Strategy"
Would you invest in certain sectors/ETFs? Pick only certain kinds of stocks? Only execute certain options trades?nnWe want to hear the what and why! The more detail, the better!
Answers
104 points
petehanse answered one year ago …
Bear Market .....NO PROBLEM ...Why Fight the tape? ...go SHORT with the Following stocks:
AMG CT GLBC IGT JLL KTC MTW PLD SRZ STRT TXT AND WFMI......If you have an acoount where you cant short .....simply buy the following ETFs which SHORT the MARKET : QID DXD SDS SKF AND SMN. When shorting be careful to set 'BuyStop' orders to terminate the trade if the market rises sharply ......with the ETf's merely have STOP LOSSES in place......As the markets drop ....you will ned a wheelbarrow for your profits ......GOOD LUCK AND GOD BLESS!
474 points
spider348 answered one year ago …
There are as many "best" strategies as there are traders. My style is shorter term. I trade sectors which don't perform well in bear markets (I want the weakest ones). I tune a few EMA's to fit the 'frequency' of the specific stocks price behavior in small time frame charts and trade off MA crosses and breakdowns in deviated price levels. I pay attention to how a stock behaves near certain price levels with volume in view. I know where the larger time frame - price, SMA and Fib (major) support and resistance levels are so I can relate that knowledge back to my small time frame charts. I only allow short orders to be placed unless buying an "Short ETF". I also run programmed strategies at this time, moving myself away from discretionary trading the tape.
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RobertW answered one year ago …
Buy leaps on great stocks and start selling short term covered calls.
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731 points
thinker70 answered one year ago …
Thanks Robert, didn't know you could do that, could you elaborate? CONTROLLING a stock is not the same as owning it, or is it? Does having the RIGHT to buy a stock at a given price in the distant future also give me the right to SELL a covered call short term on the stock i have not bought yet? Intriguing ide, appreciate more info!
My strategy is to review the fundamentals of my long term stocks, decide which ones I would like to own more of and at what price. I then dollar cost average by putting in "stink bids" to get those stocks at a low point in the WILD daily swings that forced selling is producing.
3943 points
MNSL answered one year ago …
Best Bear Market Strategy:
If you have invested in undervalued quality stocks with long term potential specially if they are going to make above average returns, profit and growth in the next 12 months and next 05 years be relax and do nothing.
Bear market is very important for value investors. Intelligent value investors will pick best of next rotating undervalued stocks with great potential.
If you know the company and its industry, you will not worry about whether it’s bull or bear market.
Invest in next rotating sectors.
Invest in neglected sectors and hidden gems
Look for high yields dividend stocks
Invest in next cyclical stocks
Particularly we must look for sectors, companies that going to make above average growth, profits returns in the next quarter and next financial year and thereafter. It is so much better companies with less debt and no debt with positive cash flow. There are turnaround companies as well. Some companies have targeted for acquisitions through out the world. These are opportunities for any types of markets.
I think we should not worry much about bear market. Through out the history we had depression, recession, bull markets, bear markets, bubble and burst and eventually it solved by the market participants themselves.
Sometimes they become greedy and not listen to anybody until markets becomes bubble. Then they become fear and and panic. It is a nature of the market.
Now markets have become very attractive through out the world.
Markets to watch:
USA
Asia Ex Japan
Brazil
I think we should avoid trading option and other sophisticated instruments in stocks markets, commodity market and forex market at least for the next 12 months. Few sophisticated investors will benefit while majority losing their entire money. in these instruments.
Avoid investing in Technology sector after March 2009. It is also better to avoid health sector as well. In every mini rally we should sell health stocks and technology stocks now. Then we should swap those stocks with undervalued stocks with great potential in the next 05 to 10 years.
In short bear market has created some sectors more attractive. There are plenty of excellent opportunities from USA, Brazil to other corner of Asia now. I think investors should accumulate aggressively from next week to until end of this year if they want to take above average returns in the next 06 months to 02 years.
Some selling strategies depend on what types of investor are you:
If your find fundamentally wrong with the company and it,s share prices are falling then sell before the loss becomes worse.
You could sell all of the shares for a profit
You could sell some of the shares and buy back the stock when the price falls back to reasonable levels
You could sit tight and let the market work thorough it problems
Sell stocks that going to underperform the market in the next 05 years.
