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

hank | Mar 17, 2010 | View Comments

bear_market_0528

Photo 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 • Blogroll • Compensation • Debt • Emergency fund • Frugal • Investing • Mutual Funds • Net Worth • Portfolio • ROTH IRA • Retirement • Traditional IRA • advice

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

    Anyways thanks for sharing :)
  • Steve
    I just wanted to say I really enjoy your blog! Keep up the great work!!

    Steve
    Common Cents
    http://www.commoncts.blogspot.com
  • 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 =-.
  • A great, highly useful personal finance blog. thumbs up!!
  • Buying technology is the key for sucess..
  • I came across your blog and thinks that your post is interesting. Thanks for sharing it.
  • 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 =-.
  • get Free Nifty tips
    .-= Nifty Tips´s last blog ..Nifty Tips- Tomorrow market position and Recommendation =-.
  • 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 =-.
  • "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?
  • 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.
  • 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.
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