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One of the safest strategies, and the most extreme, is to sell all of your investments and either hold cash or invest the proceeds into much more stable financial instruments, such as short-term government bonds. By doing this, an investor can reduce his or her exposure to the stock market and minimize the effects of a bear market. For investors looking to maintain positions in the stock market, a defensive strategy is usually taken. This type of strategy involves investing in larger companies with strong balance sheets and a long operational history, which are considered to be defensive stocks. The reason for this is that these larger more stable companies tend to be less affected by an overall downturn in the economy or stock market, making their share prices less susceptible to a larger fall. With strong financial positions, including a large cash position to meet ongoing operational expenses, these companies are more likely to survive downturns. These also include companies that service the needs of businesses and consumers, such as food businesses (people still eat even when the economy is in a downturn). On the other hand, it is the riskier companies, such as small growth companies, that are typically avoided because they are less likely to have the financial security that is required to survive downturns.
These are just two of the more common strategies and there is a wide range of other strategies tailored to a bear market. The most important thing is to understand that a bear market is a very difficult one for long investors because most stocks fall over the period, and most strategies can only limit the amount of downside exposure, not eliminate it.
In a bear market no financial instrument is safe to invest in if you adopt only a long strategy. The base way to make money in a such kind of market is to use short selling as Divyesh Patel already exposed, I only add at that explanation the information about the fact you also have to pay an interest to the broker on the shares you borrowed. Technically that insterest is of use also to pay the real holder of those shares, in fact the real holder is not the broker necessarely. However if you are not used to short selling, or you don't have that service by your broker, then you can trade some ETF/ETC/ETN that follow the contrary trend of, typically, a market (index) or a commodity.
Agreed with Georgei.
Yes one can make money in down trend of market as it is possible to short sell the stocks in electronics markets now a days. Only the thing needed is a right correction to be known from a trend with the help of technical analysis theory and you can sell a right stock at higher price and buy it back at a lower price to achieve profits. Here your complete trade is squared off with first short and then buy.
Short Selling- Short-Selling provides a relatively simple way to trade profitably in stormy market conditions. It is an investment technique that allows us to profit from stock that is dropping in price.
Shorting is a way to make money on a stock you expect to go down in price. In order to "sell short" you first borrow shares of the stock from your broker, sell them, and then wait until the price falls. You then buy them back at the lower price, return the borrowed shares and keep the difference, minus normal brokerage costs.
Investing in the markets the most Municipality such as investing in government bonds in which the rate risk is small and reserved rights, and that the investor would avoid falling market and in companies with high volume there is a kind of stock called defensive stocks to invest these stocks in emergency situations to maintain the stability of the market and lack of deterioration in stock prices making the shares bug maintain a certain amount of stability, of course, this Alasallib only to reduce the size of the risk is not deter addition to the subject of the insurance system and is there a lock on stocks and also invest in financial portfolios who believes in you invested the minimum Baudmaalk
