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How to Make Money in a Bear Market

How to Make Money in a Bear Market: The Ultimate Guide

Today, we will try to understand the exact way how to make money in a bear market. Most people may feel confused because they think it’s not a good idea for investors. A bear market is the opposite of a bull market. A bear market is a situation of the market when the price of stock or securities falls sharply, creating a negative impact in the mind of the investors. This figure of fall can be up to 20% in the market index.

How to Make Money in a Bear Market: Step by Step Guideline

Before thinking of making money in a bear market, we need to be clear, “What stocks go up when the market goes down?” Buy stocks of those companies whose products are in daily need of others, and also you can buy stock of ecommerce companies like Amazon and Alibaba. The consumer electronic brands also do good in the time of going down of the market.

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Buy the Stocks Which Have Massive Demands

There are always some types of stocks that are regarded as suitable investments even in a crisis. Think about this pandemic situation. In different parts of the world, we see the massive collapse of the market price. But companies like Pfizer and Spacex have added value to the index and an investor’s portfolio. 

It is very typical not to keep the share and selling them during the crisis of the market. It is more critical to find the best possible solution and making an investment even in this crisis.

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Be Patient

The patient is the key in the time of the market’s going down. Any quick decision at that moment could lead to more loss in the portfolio.

Choosing the Right Stock

Not every stock is going to benefit you during the bearish condition of the market. Have some research and find the potentially good valued company’s stock.

Right Investment Decision

Then again, as the market goes down, the probable scenario is that the stock’s value and the price will be lower. Even the top-performing companies’ securities will face this dark time.

Now, don’t be too reactive, investing all the money at a time just buying the Random low price share. Instead, fix your investment model and do invest gradually in the companies of potential.

Understand the difference between stock and share

Be a Horse of the Long Race

As we already discussed, you need to be very precise in every move if you want to win in the long run.

Bear Market Facts

A bear market is an extreme condition of the market. And the fact is that it is not the long-lasting scenario of the market. There is a bear market situation every three or four years, and it doesn’t last long more than one year.

A bear market can happen by the sudden change of the situation, as the attack of the pandemic, sudden geopolitical change, the rise of the price of the daily goods, and so on. Though it is a financial crisis, the loss of the value of the investors’ portfolio does not necessarily mean the total economic downfall of the country.

Eventually, one can ask, Is a bear market good or bad?

It will not always be correct to define the bear market as completely bad. However, the bearish features of the market and the imminent fall of the stock price can bring pessimism in the investors’ thoughts.

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Historical Example of Bear Market

After the Second world war, there is a significant reduction in the bear market. However, it is expected from time to time in every part of the world. The earliest example of the bear market is the Great Depression of the 1930s. The most famous modern-day market collapse is the 2008-09 economic depression and stock price collapse.

Bear Market Investing Strategies

Investing in the time of economic downturn is very tricky at some point.  A few things need to be in our mind how to keep going during a bear market. There are some strategies to follow during this gloomy stage of the financial market and keep investing in it.

Psychological Strength

You need to tighten your heart and show resilience. And hoping that the market will turn around soon. Some people will lose hope and show pessimism. At this point, you need to see the situation to invest in a new way.

Making Adjustment

Make adjustments when necessary, find and research the market properly, and keep your hope alive by finding potential investment paths. You should look for new opportunities and never give up.

Playing Dead

Playing dead as an investor is a great tactic when a collision happens in the market. When everyone is tensed, you need to hold your nerve. Wait for the right moment to react, and don’t just go with the flow.

Taking Calculated Risk

Whatever the situation is, your goal should be making a profit in the long run. If you need to take some risk with calculation and investing to gain positive results, you should go for it.

Professional Help

Take assistance from the professionals and follow the advice of the experienced if needed. As Warren Buffett says, “Don’t alter your long-term value investment tactic.”   

Right Decision Making

Finding the good and potential company and buy their stocks at a lower price. This could be game-changing for you.

How do You Make Money as a Bear?

Becoming a bear is not easy, and it is also tricky. In this pandemic situation, the bear market situation is going more down, and many people sold their stock out of fear and hoping for some recovery. But as the situation changes and the market starts to rise, we see the real winners. One can be in a profitable position by holding the position.

Also read: Intrinsic Value vs Market Value

Is It Wise to Invest in a Bear Market?

It is wise to find excellent and potential companies and buy their stocks lower during the bear market.

How to Predict Wrong Time Ahead?

Sometimes it is predictable to see what will happen in the market by the signs and indications.

  • One of the reasons for the market’s imminent crash can be becoming too excited about the market.
  • The risk of increased recession
  • Fewer stocks are on the driving seats, and most of the other are fail to perform well.
  • The rise of the rate of inflation is a potential sign of a bear market.
  • A country or region can experience an imminent or existing unemployment crisis.
  • The psychological aspect of an imminent market crash is going with the flow.

The conditions are incredibly financial, and these need some basic and expert level understanding to predict what is going to change in the stock market. 

What Stocks do Well in a Bear Market?

The stock that has potential will do good in the long run; this kind of share will be good in a bear market. There is a specific type of stock called “defensive stock” that generally shows better performance in a crisis.


A bear market is a condition when there are more sellers than the existing buyers in the market. As we know, the stock price falls when the supply of the stocks exceeds the demands. It gives the market a bearish look. Keeping your calm, following the expert’s advice, and finally, your personal research could save you from enormous loss in a bear market situation. We hope after reading the article, now you know how to make money in a bear market.