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Yesterday at 8:42 pm by sashimaal

» Quick Checklist for Selecting a Stock
Sat Jun 23, 2018 1:04 pm by spw19721

» HUNA.N0000
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»  මෙරට විශාලම ආයෝජනය වන හම්බන්තොට වරායේ අවසන් ආයෝජන මුදල වරාය අතට බාර දෙයි
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» CCS.N0000 ( Ceylon Cold Stores)
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» රුපියල තවදුරටත් පාවීමට ඉඩහැරිය යුතුයි - ජාත්‍යන්තර මූල්‍ය අරමුදල
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» ඩොලර් බිලියන 10 යි – මහ බැංකුව ඉතිහාසයේ වැඩිම විදේශ විනිමය සංචිතය ගොඩනගයි
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» මාස 02 කදී කොටස් වෙළෙඳපොළ සියයට 4 කින් කඩා වැටිලා
Tue Jun 19, 2018 8:31 pm by serene

» කිම් - ට්‍රම්ප් හමුව: දෙරටේ නායකයෝ සාකච්ඡා අරඹති
Sun Jun 17, 2018 10:55 am by Ethical Trader

» DOCK.N0000 (COLOMBO DOCKYARD PLC)
Sat Jun 16, 2018 8:20 am by spw19721

» TPL.N0000 (TALAWAKALE PLANTATIONS )
Thu Jun 14, 2018 7:17 am by lanka

» සපත්තු පෙට්ටියකින් හමු වූ චීන මල් බඳුන පවුම් මිලියන 14 අලෙවි වේ
Wed Jun 13, 2018 12:03 pm by Ethical Trader

» Dividend Announcement
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» LLUB.N0000 (CHEVRON LUBRICANTS LANKA PLC)
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» ලංකාවේ ඉපිද, බ්‍රිතාන්‍යයේ නගරාධිපති පදවියකට පත් වූ කරීමා
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» KGAL.N0000 (Kegalle Plantation PLC)
Tue Jun 12, 2018 2:40 pm by Ethical Trader

» Where in the world is it easiest to get rich?
Tue Jun 12, 2018 7:53 am by CK

» "එළ හරකා - මී හරකා ආර්ථික ප්‍රතිපත්ති" සහ ඩොලරයට සාපේක්ෂව පහළ වැටෙන රුපියල
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Thu Jun 07, 2018 6:16 pm by sashimaal

» මුහුදු පතුලේ තැන්පත් කළ දත්ත ගබඩාව "යථාර්ථයක් විය හැකි විකාර අදහසක්"
Thu Jun 07, 2018 6:00 pm by Ethical Trader

» KFP.N0000(Keels Food Products PLC)
Thu Jun 07, 2018 8:54 am by lanka

» Sri Lanka Port Authority profits up after China takeover of Hambantota
Wed Jun 06, 2018 5:58 pm by Ethical Trader

» Tax hike to trim profits of Sri Lankan life insurers: Fitch
Wed Jun 06, 2018 5:55 pm by Ethical Trader

» Rupee weakens, stocks gain 0.23-pct
Wed Jun 06, 2018 5:54 pm by Ethical Trader

» ශ්‍රී ලංකාවේ 'අධිකරණයට අපහාස කිරීම' ගැන දැන සිටිය යුතු නීති පසුබිම
Tue Jun 05, 2018 6:50 pm by කිත්සිරි ද සිල්වා

» Sri Lanka finance ministry accounts qualified by Auditor General
Tue Jun 05, 2018 1:28 pm by Ethical Trader

» IFC invests US$2.5mn in Sri Lanka's PickMe
Tue Jun 05, 2018 1:22 pm by Ethical Trader

» Sri Lanka state banks most in need capital for Basel III, new risk identified
Tue Jun 05, 2018 1:21 pm by Ethical Trader

» Sri Lanka's ETI Finance able to settle small depositors if liquidated
Tue Jun 05, 2018 12:53 pm by The Invisible

» Oil steady as extra U.S. supply balances strong demand
Mon Jun 04, 2018 3:59 pm by කිත්සිරි ද සිල්වා

» In the Meantime, Within Our Shores !
Mon Jun 04, 2018 3:32 pm by කිත්සිරි ද සිල්වා

» Cartoon of the day...
Mon Jun 04, 2018 11:47 am by nihal123

» SPEN.N0000
Sat Jun 02, 2018 6:19 pm by Ethical Trader

» තායිලන්තයෙන් අභ්‍යවකාශයට යන 'දූරියන්'
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» බන කියන පුංචි දරැවා
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» Exclusive: Cricket match-fixers caught in the act in Sri Lanka
Mon May 28, 2018 7:41 pm by sashimaal

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Where do investors tend to put their money in a bear market?

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Where do investors tend to put their money in a bear market?

Post by කිත්සිරි ද සිල්වා on Fri Nov 20, 2015 6:41 pm

Where do investors tend to put their money in a bear market?

A bearish market is traditionally defined as a period of negative returns in the broader market to the magnitude of between 15-20% or more. During this type of market, most stocks see their share prices fall, often substantially. There are several strategies that are used when investors believe that this market is about to occur or is occurring, which depend on an the investor's risk tolerance, investment time horizon and objectives. (For related reading, see Surviving Bear Country.)

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.

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කිත්සිරි ද සිල්වා
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