Tips for Investing in Bear Market : NobleTrading Blog

Tuesday, February 10, 2009

Tips for Investing in Bear Market

Most investors are afraid of investing when the prices are falling or at bottom. But many others, especially value investors, take this as the good opportunity to invest. Here are some tips for investing in bear market.

Keep the basics right – good analysis, stock screening, risk-management, portfolio allocation, etc.
Look for long-term profits and keep your profit goals realistic. It is also good to invest in stocks which are expected to offer good dividend.
Never make quick investment decisions without thorough analysis.
Explore the market history – although history does not repeat exactly, it can provide you significant insights about where the markets are heading.
Diversify your portfolio investments so that collapse of one industry/sector does not wipe out our money.
Get more involved and be an explorer – read some good books and reviews, constantly monitor market trends, get advice from experts, and compare current prices to historic highs and lows.
Invest in markets and products that you know, so that you can expect them to perform well.
Use leverages logically (you should use that), and carefully use derivatives to maximize your profit and to limit your risks.
Start with the mind open and paper clean; no presumptions. Treat all things according to their merit.