Bear Market Investing Tips

Since stock markets tend to be fairly cyclical, a savvy investor should be aware of what strategies to employ for ensuring the best returns from bear market investing. A Bullish trend is inevitably followed by a bearish market and vice a versa. Analyzed properly, bearish market not only gives investors a good time to re-invest and minimize their losses, but also offers investment opportunities in the form of short selling the products. Since most blue chip stocks are trading at relative lows in comparison to their average of the past couple of years, it opens an investment window for investors because when the markets bounce back, the blue chip stocks are normally the first to benefit from a rally. It is a good time to buy good blue chip stocks at a lower value and also to diversify your portfolio. You may want to consider taking a slightly longer-term position to derive the best returns. At present there are a lot of different sectors that one can investing in, as these are expected to grow the fastest once the bullish trend starts.

Healthcare Sector:

This sector is expected to grow quite rapidly regardless of the global economic conditions. This sector is driven by a growing and aging population that will demand more and more medical services. A growth in this sector is also likely to drive growth in the pharmaceutical industry as well.

Software Publishing:
Since more and more firms have starting investing heavily in information technology, this sector is also expected to grow. The growth in software publishing has more than doubled since 1990’s and it is expected to grow faster than any other sector. Evolving trends such as ‘Software as a Service’ (SaaS) is significant growth driver for this sector.

Energy, Oil and Gas:
With the ever-increasing need of energy in the world, the oil and gas sector remains fairly attractive despite short terms volatility. Although in the bearish market companies are taking a very conservative approach to their investments, once the cycle turns around, the oil and gas sector is expected to come up quite quickly. Given the scarcity of traditional energy sources and sponsoring of projects by large energy companies, the alternate energy sector is also coming up and should prove to be an excellent investment opportunity in bear markets.

It really doesn’t matter which sector you invest in because you will be able to buy into most stocks at discounted rates in bear markets. The most important thing to note here is that you should always try to invest in all the blue chip stocks. As mentioned above, once the market bounces back, most of the blue chip stocks are likely to bounce back the quickest in the group.

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