What Do I Do During a Bear Market? What Do I Invest In?

| Mar 17, 2010 | 38 comments

bear_market_0528Photo by: artct45If you’re between 20-40 years old, don’t do anything. Stay where you’re at, markets fluxuate. That is their nature and that should have been something you learned before you got it. If this is your first time hearing about it, don’t worry and more importantly, don’t run. Let the traders panic. That is their job. They’re pounding down 15 cups a coffee per day and enjoy the stress. Let them deal with it. You’re paying a person that the traders are relaying information to in your mutual funds. You’re 3rd tier on that – sit back and enjoy the cheap stocks you’re getting into.If you haven’t sold, you haven’t lost. Stick to your guns and don’t get scared out of the market, recessions happen. But they always come back. As long as you still have a job, you shouldn’t be worrying. If you HAVE lost your job, you should probably not be reading this blog, try this one.


Buy technology stocks and fund. They’ve done really well this year, and think about it. We’re in the technology era; people WANT technology and are willing to pay for it still. As long as you’ve got a good time horizon for investing (10+ years left till retirement) I think you’ve got a good shot to get in at the bottom floor during the recession.

There are special recession ETFs geared towards recession. Look at medical, people always need to go to the doctor. Look at Claymore Securities.

Ultimately, my recommendation is to keep your money headed towards your investments as long as you’ve got a job. Keep your portfolio on track, this is the time when many people are getting out of the game, and as long as you’ve got time on your side, a perfect time for you to capitalize on the low prices being tossed around.

Do you have any secrets you’d like to share? Anything you’ve done in the past? Advice for the future?

Filed Under: 401K • advice • Blogroll • Compensation • Debt • Emergency fund • Frugal • Investing • Mutual Funds • Net Worth • Portfolio • Retirement • ROTH IRA • Traditional IRA

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  • http://streamingincome.blogspot.com naveedsmind

    Great points Hank. But don’t forget to look at consumer staples and funds more weighted there. Energy, food, transportation are examples of things that consumers need even when the going gets tough. If you’re under 40 – now is your chance to test your patience and make some slow hard-earned cash.

  • http://myinvestingblog.com hank

    ah – good point Naveedsmind. I actually was going to mention that but blanked. That really can be a post in itself; investing in core services that we’ll always need is a good bet and Energy, Food, and Transportation aren’t going anywhere in the near future.

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  • http://highyieldinvestmentreview.com/ Don | High Yield ETF

    “If you haven’t sold, you haven’t lost.”

    That is great! I never thought about it that way, but you are right! If anything, you could buy more stock when it goes down, and spread your losses across more shares. That way, when the company does finally collapse, and it liquidates, maybe you’ll be the majority shareholder and get all the assets! Who knows?

  • http://fundtips.blogspot.com/ Daddy Paul

    If I am relatively certain we are going down a 2 times inverse ETF such as QID does a nice job in a bear market.
    .-= Daddy Paul´s last blog ..The American Opportunity Tax Credit =-.

  • http://nifty-tips-calls.blogspot.com/ Nifty Tips

    get Free Nifty tips
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  • http://fundtips.blogspot.com/ Daddy Paul

    In a bear in your 401K about the only thing you can do is go to cash. I did this in Feb 2000. And in November 2004. Both times I got back in when the market was much lower. I missed 2007-2009. Get um next time.
    .-= Daddy Paul´s last blog ..The best taxable bond mutual funds =-.

  • http://www.debtzerocentral.com negotiate credit card debt

    I came across your blog and thinks that your post is interesting. Thanks for sharing it.

  • http://www.ibertestint.com materialstito

    Buying technology is the key for sucess..

  • http://premiumfinancecorporate.com.au/ premium finance

    A great, highly useful personal finance blog. thumbs up!!

  • http://forexautomoneyreview.info Mel

    I think that instead of investing, you should take stock of things first.
    .-= Mel´s last blog ..Is Forex Automoney a Scam? The Truth Will Surprise You =-.

  • Steve

    I just wanted to say I really enjoy your blog! Keep up the great work!!

    Steve
    Common Cents
    http://www.commoncts.blogspot.com

  • http://www.lloydsmetals.com/ Gold & Silver

    Great work on this post. I have also had some success with Precious Metals and leveraging it.

    Anyways thanks for sharing :)

  • http://forex-automoney.us automoney

    I’ve lost so much I don’t know what to do. But I found that I’ve made money from property that I have held longer term. Best not to rush in.

  • dimpyarora

    If the market is bearish, Just cut off your position at Stoploss and if you wants to invest then wait for the market to be stable.

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  • http://letsfindmoney.com John

    Protective puts are useful in a market like this! But even without that you should be fine if you're buying for the long term.

  • http://forex-automoneyreview.com Automoney R

    I agree it is the perfect time for you to capitalize on the low prices being tossed around. Be bold and go for it.

  • http://laduiattorney.info LA

    Bear is a better time to invest than bull.

  • Entrepreneurialre

    Invest in tax liens right now…i use a group that buys them in my name and has terrific on line reporting for me…http://www.lienbase.com

  • Investing Alternatively

    Go back to the roots, invest in something tangible and always in demand: Timber. Studies show that timber has outperformed major stock indexed during 25 – 30 year horizons. See tropical timber investment opportunities on http://www.investingalternatively.com

  • http://www.facebook.com/alokdelta78 Alok Kumar

    I agree it is the perfect time for you to capitalize on the low prices being tossed around
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  • Kjordan3637

    This is a huge topic you are touching on. If you are an active trader, or have thought about managing your money, be careful! “Doing nothing” could be devastating.

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  • http://forexautomoneyreview.info Kenneth

    Don't panic in a bear market. Be rational. I think that is the best advice anyone could have given me.

  • MyATM

    Great article and awesome blog. A lot of people with financial crisis will surely benefit from this. Keep up the good work!

  • http://www.forexreviewers.com/blog/ John

    Great article and advice. I usually keep adding to my positions when we're in a Bear market and as a result when the market finally reverses, I usually have a great year ;)

  • trade4target

    Hey, very nice site. I came across this on Google, and I am stoked that I did. I will definitely be coming back here more often. Wish I could add to the conversation and bring a bit more to the table, but am just taking in as much info as I can at the moment.
    Thank You
    Trade4target

  • http://mbfxsystem.org mbfx

    It is time to take stock of things.  Becareful but also on the other side not to be over cautious as bear can be a good time to invest in growing sectors.

  • Sharetipsinfo

    Seriously don't understand why traders are afraid of falling market? If you trade in future then it is one of the safest time for trading and minting money and yes investors should wait for some time who only like to go long and they can grab many stocks at quite reasonable lower price.

  • http://www.facebook.com/people/Saam-Patel/100000600567174 Saam Patel

    Seriously don't understand why traders are afraid of falling market? If you trade in future then it is one of the safest time for trading and minting money and yes investors should wait for some time who only like to go long and they can grab many stocks at quite reasonable lower price.

  • Nifty Tips

    With futures, it is possible to open the long and short positions in the same manner and at the same cost.

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  • nifty future

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  • Anonymous

    A bear market is always a great time to run those boring hours looking at balance sheets and obscure 10-Ks.  When stocks can be so over priced it can really be a gift in disguise as it gives the average investor an opportunity to sit back and consider the whole picture, instead of feeling that stress to look at the latest deal that popped up on seeking alpha. 

  • http://www.rightinsurance.ca Brian

    Hi Hank,

    I thought I’d comment on your comment on squawkfox’ post on life insurance.  I am from Canada but I wrote a story on insured annuities over a year ago on http://www.milliondollarjourney.com/how-annuities-work.htm

    In a nutshell I don’t think one could get 6-8% income for life guaranteed at 65.  Even though I am from Canada the numbers should be about the same.  (though our Taxes are higher…don’t worry you will catch up!!)

    (your comment back in 2008 on sqwakfox)
    I admit it, I was baffled into a whole life insurance policy a few years back, but have realized the woes in my ways. It really is ridiculous to see what an agent will try to sell you. I can assure you the next thing on the list they’ll try to peddle is an annuity. When they do that, you know you need to run away, fast. I like your writing style, you’re officially RSS”d!

  • http://moneyvarta.wordpress.com/ Money Varta

    For any investor it is important to safeguard one’s investments. In times of bears in market, securing values of investment becomes most important task in the hands of the investors. for this purpose investors are required to look after various investment avenues.

  • Patricia_85

    in the current stock price in a downtrend is a good time to start investing. equity investment is a long term investment for us to choose which company’s stock is performing well do not be afraid of the momentary fluctuations. on my blog http://www.buystocksnow.info many articles about stock investing