How to Make Money in a Bear Market

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how to make money in a bear market

Many investors are asking how to make money in a bear market. This question is being asked because there is a very good chance that stocks will continue their declining trend or may even take a significant jump. There is no question that the economy has taken a dive and there are many areas of the economy that are in dire straights. However, there are also many investments that have performed much better in bear markets so these people could be just waiting for the right time to cash in on their investments. Here are some ideas of how to make money in a bear market:

First, if you have experience buying and selling stocks you will likely have an idea how to make money in a bear market. There are many stock market strategies that have been used throughout the history of investing. Some of the popular ones are shorting stocks to make a profit when the stock price goes down and buying them when they are about to rise. However, bearish stock prices have a tendency to fall even further so it could take a good deal of patience and time to successfully execute these strategies.

Second, if you have some money to invest this could be the perfect time to make some profits as well. Most investors who buy during bear markets wait until they begin to fall lower before putting their money to work. If you have some money to invest now, however, you can act before the price begins to drop. You can buy shares at a low price and then either sell them or pick them up when the prices begins to rise again.

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Third, many investors like the practice of putting their money into a call or put option. A call option is a contract that allows the buyer to buy or sell a specified number of shares at a specific strike price. Put options are used when the stock price is falling but does not yet reach a certain level. The buyer puts the option on the stock, so if the price drops below the strike price by a set amount, the buyer will be able to purchase or sell shares without having to pay the full amount.

Of course, this method does require that you use information from a reliable third party. Without such information, you will find it difficult to make money in a bear market. In this case, investing in stock market information services could be your best bet.


many investors enjoy buying call options or writing covered calls when stock prices drop. These strategies involve selling stocks at a discount (sometimes for free) so that when the prices begin to fall, you can sell them at a profit before the stock market makes another big drop. However, this strategy requires knowing when and how long the stock will fall. For instance, if you believe that a company is about to release a new product, you may want to wait until a few days or weeks before you attempt to purchase the shares.

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Fifth, how to make money in a bear market is also possible when you invest in commodities. For example, oil and gas are two good commodities to buy because they typically rise in value even when the overall stock market is declining. Likewise, gold is also a good investment. You can purchase gold bullion and hold onto it during a time when the gold and oil prices are rising. At the same time, you can acquire defensive stocks like copper and silver, which also appreciate in a declining economy.

In addition, some investors tend to buy stocks whose revenues have declined because they feel the economy is on the rebound. Again, timing is extremely important in this type of scenario. How to make money in a bear market is simpler when you invest in the defensive stocks that many experts recommend.

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