Where do investors tend to put their money in a bear market?

Investing, Asset Allocation
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May 2017
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If you are still working, a bear market can be an opportunity to buy more stocks at cheaper prices. The best way to invest during bear markets is to put small amounts in every month. You invest a fixed amount, say $1,000, in the stock market every month regardless of how bleak the headlines are. The strategy is called dollar-cost averaging.

Investing every month doesn't work all the time especially if the market is in a long-term uptrend, it is best to have every dime invested as long as possible. But in bear markets regular monthly investing works.

Also investing in stocks that have value and that also pay dividends. Since dividends account for a big part of stock market gains then the bear markets would be shorter and less painful if dividends were included.

It is important to have a financial advisor to “hold your hand” during market downturns. An advisor can help you by preventing you from selling out at the wrong time based on your fear or emotion. 

Additionally, having a diversified portfolio in stocks, bonds, cash, and alternative investments is important in a bear market. Alternative investments are non correlated with the stock and bond market so over time having this type of asset allocation has proven to out perform the older more traditional stock, bond and cash portfolio asset allocation model.

 

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