How to Buy Stocks in a Bear Market

How to Buy Stocks in a Bear Market

Should you buy or should you sell?

While everyone is running to sell of their iffy stocks and the market is fluctuating faster than a Monarch butterfly's wings, it just might be the time to make some cautious purchases. But what do you need to know if you're going to take the plunge?

Difficulty: Moderate

Instructions

1.      Step 1

Buy what you know and like. This is a great rule of thumb for purchasing stocks in a bear market. Chances are, if you like the company and the product, others will too, leading to a increase in value when the market turns.

2.      Step 2

Research your top picks online for customer satisfaction ratings. If you are stuck with a cellphone company that overcharges and has bad customer service, see what others are saying. If there are lots of complaints - pass that one up.

3.      Step 3

Look to the future. What's hot and what's on the horizon? Listen to your local business news. Pay attention to the Science and Health headlines. If everyone's worried about global warming, look for solid alternative energy stocks to invest your money.

4.      Step 4

Diversify. You don't have to buy a mutual fund to take advantage of diversification. Trust your own judgment. Your opinion and your observations are as good as the next guy's.

5.      Step 5

Take advantage of lower stock prices in a bear market but don't just run out and buy the cheapest ones. Do your homework first and don't let cost be your only deciding factor.

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