Bear Market Strategies

Global Markets Stocks and Indexes
#1

Hello you amazing people that make up this forum and very intelligent people. Hope you’re well.

I have been researching lately that the US stock market is in a bear market, due to the rising interest rates that the Fed are imposing. I note there is some interesting ETFs such as ProShares UltraPro Short QQQ ETF that benefit from a decline in the markets. Do you kindly think it would be worthwhile investing in this please? Further does anyone kindly have any other ETFs or strategies to make money in a bear market please, i would be forever grateful for any advice you can give.

Thank you very much for your support and for reading my post. I do hope you have a lovely weekend.

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#2

I don’t invest in equities so my opinion is very subjective.

But if I were to I’d do a very thorough assessment on the overall market to determine if it truly is as bearish as the news reports say. The question is, even if it is why would you want to invest in a 3x leveraged instrument that’s heavily representative of the tech sector? As opposed to a more general index, like the S&P 500?

To justify it I’d want to have very specific information of the overall direction of the sector, how top heavy the index is and the projections for those top heavy stocks. I’d really want to have a very clear direction on how the NASDAQ is expected to move before buying into a leveraged instrument.

Historically the tech sector are among the first to dip in bear markets no doubt and for all you know it’s the same this time around as well. But I’d really do my due diligence before considering a 3x leveraged short. This, to me, is a very aggressive investment option, as opposed to perhaps more safer alternatives. For e.g. looking at utilities, consumer staples & healthcare.

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#3

I made some money of the ultrapro shortQQQ in the last covid sell-off. However, it’s a bit like riding a bucking horse in a rodeo - the profits / losses stack up VERY quickly/scarily and for some reason which I’m too dumb to understand the profits / losses become weirdly distorted and out of sync with the index the longer you hold it. Something to do with it being 3 * leveraged I think. I would buy a non-leveraged shorting index fund if I were you. Or just short individual shares (although I believe in some countries including USA this isn’t allowed?)

To be completely honest with you (and I know this wasn’t your question) I would prob start to think about buying long now that Nasdaq / S&P have fallen about 20%. Maybe not just yet, but in a little while and in tranches every few days… Of course, I might be wrong though!!

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#4

Tobacco, utilities, household-goods and gold-miners usually do OK in true bear markets. I remember the 2007 recession when Randgold was gaining %'s per day when everything else was crashing all around. But personally, I wouldn’t go long on anything in a Bear.

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#5

Bitcoin and crypto like ETH, XRP, CasinoCoin are a good hedge long term, but expect more volatility short term.

Will probably see BTC under $10k, ETH around $100, and xrp under $0.10 with this bear market crypto winter.

CasinoCoin is about the only one I expect to increase significantly in the next 18 months.

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#6

Thank you very much for your responses, you have all been amazing. Really appreciate your help with this.

darthdimsky i appreciate you sharing your thoughts that this is a very aggressive investment. I really appreciate your advice that you would want very specific information of the overall direction of the sector, how top heavy the index is and the projections for those top heavy stocks. I agree i think a more general index, like the S&P 500 would be better. Thank so much for your comments.

Blue2 thank you for sharing that UltraPro Short QQQ is like riding a bucking horse in a rodeo, now i understand how aggressive the investment is. I think you are right soon i will start looking at buying long on the Nasdaq, thanks so much for your comments.

PhoneticNachos i will definitely have a look at CasinoCoin thanks for sharing. Can i kindly ask please when do you expect would be a good time to go long on Bitcoin and Crypto do you think maybe the back end of the year September / October please?

#7

Dude, I hope I wasn’t being harsh. With the FED expecting to be as aggressive as it is on the rate hikes, going short on the NASDAQ does sound like a high probability move. Could be a low risk/high return opportunity if all the ducks line up.

When I first looked at the SQQQ I thought that could be used as an awesome hedging instrument. If I were to consider shorting the NASDAQ I’d want to consider the PSQ though. Then again my knowledge and experience is severely limited in this area and you probably know better.

Blue mentioned these industries doing really well during bear markets. These are all industries within consumer staples & utilities (except for gold miners). Most investors tend to go to these sectors during bear markets because these are defensive sectors (consumer demand for these sectors don’t wane as much as it does for other sectors). With rising commodities expected consumer staples could even do better than it’s done historically during bear markets. That’s something to keep an eye on.

If you’re still intent on sticking to the SQQQ you could try allocating a limited portion to it while you try other options. You know, diversify your portfolio a bit.