Profiting in a Bear Market

One of the questions often asked of any trader is, “What happens to your strategy in a bear market?”  It’s a fair question.  If you were using a strategy to buy broad market ETFs and hold them for the long haul, you may find yourself very unhappy right now. 

Of course it depends on when and how you buy, but it’s easy to get upset about the fact that we are still 20% away from an all-time high in the SP500, and nearly four years removed.  In spite of the great rally of the past two years, the SP500 is still at 1999 levels!  It would really stink to have 12 years of investment time go by with a big fat ZERO to show for it.  Sadly, that’s what bear markets have done to this long-term buy-and-hold strategy.

So… you might be wondering, is there a better way? Is it possible to profit during a bear market?  The next few posts are designed to answer these questions.  Specifically, I will look at how the MultiStage Trading System has held up during bear markets of the recent past.  First, we must decide what a “bear market” looks like, which is the topic of the next post.

Good Trading…