How should a small investor prepare for future falling markets?

Discussion in 'Trading' started by lojze, Mar 5, 2017.

  1. lojze

    lojze

    We have a bull market right now, but we will sooner or later fall into bear market. Better be prepared.

    But how?

    By reading blogs, following financial websites?

    Anything else?
     
  2. Robert Morse

    Robert Morse Sponsor

    Play smaller if you think the market will fall.
     
    murray t turtle likes this.
  3. truetype

    truetype

    Buy puts. That's what they're for.
     
    JSOP, KDASFTG and wave like this.
  4. pann2310

    pann2310

    Have a list of things you want to buy and a framework for how to deploy capital. The market goes down 10-15% like last year...try to put that move in context and decide how much to deploy. Don't listen to the talking heads...have strong hands.
     
    ET180 and wave like this.
  5. ET180

    ET180

    If you're unsure, it's best not to risk capital. Reduce your exposure, possibly by doing more defined-risk trades.
     
  6. Pekelo

    Pekelo

    Sell calls, in a vertical spread...
     
  7. all in US treasuries until they mature for a guaranteed 2-3% annually and if stocks crash you're making even more money if bond prices soar like they usually do in bear markets
     
  8. JackRab

    JackRab

    Don't read blogs, since they all tend to gravitate to either very bullish or very bearish... then, depending on your own thoughts, you will end up only reading one or the other.

    When you yourself are bearish, I bet you will mainly read stuff about how we all need to go into gold, sell everything, even buy land and grow your own veggies and shit.

    When your bullish... all you will end up reading is which stock is the next Apple, which industry you should be invested in, the sky is the limit.

    Same with how you vote... you tend to only read the stories you lean towards.

    Keep an open mind, that's my tip of the day....
     
    treker5150, Jones75 and luisHK like this.
  9. R123

    R123

    Nobody knows when. Sooner can be tomorrow or several weeks plus. Have an action plan that fits your strategy for a downturn. If you do, don't execute the plan until market moves as planned or else you may pull out to quick in fear and miss a big rebound.

    If you do not have a "defense" plan ( sounds like you might not ) you may want to lighten up or go flat, and make one. BECAUSE the worst time to figure out what to do is in the middle of a big move against you. Panic or Freezing like a deer in headlights are poor equity builders.
     
  10. People have been waiting for that big, so-called market correction to happen since around 2010 or 2011 or so :confused: o_O

    Since that time, people have been saying it will correct next month, or within six months or a year tops.

    But to answer your basic question...if you think the market will turn, simply short/reverse it.
    Or if you're really feeling bold, buy a bunch of put options instead and really make a killing.

    Instead of waiting for more than a year for this to maybe play out...do this on a daily basis...,Now you're positioned for A-bomb returns...,
     
    Last edited: Mar 5, 2017
    #10     Mar 5, 2017