ABC Strategies that will help you SURVIVE a Bearish market

With the recent deepen downturn in market and feedback regarding how to cope under such  conditions, there is the need to discuss how to cope in a bearish condition (Market wide decline in stock prices). Hence we will be looking at 3 strategies for achieving that.

1. Don't be emotional
As an Investors you should try to always separate their emotions from the investment decision-making process. So, it is strictly recommended that you base your decision on facts and figures that affect stocks prices not the way you feel or emotional attachment to a particular stock. I have been a victim on several occasions. 

2. Diversification 
Having a percentage of your portfolio spread among stocks, bonds, cash and alternative assets is the core of diversification. How you slice up your portfolio depends on your risk tolerance, time horizon, goals, etc. Every investor's situation is different. A proper asset allocation strategy will allow you to avoid the potentially negative effects resulting from placing all your eggs in one basket.

3. Invest Only What You Can Afford to Lose
Investing is important, but so is eating and keeping a roof over your head. It's unwise to take short-term funds and invest them in stocks.  Remember, bear markets, and even minor corrections, can be extremely destructive.

On a general note, please see a bearish Market as an opportunity to acquire undervalued stocks. *Warren Buffet also saw it in this light. According to him, a bear markets is a buying opportunities because the valuations of good companies get hammered down along with the poor companies.*

Happy Trading

Ambrose Omordion

PS: The current position of the market is not a new one. As a matter of fact, you cannot control the current market. What you can control is your response.

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