"Bear markets are normal and necessary and serve to clean up prior excesses. They allow the market to create a whole new set of chart bases and leaders for the bull market that, in time, always follows. So, never let yourself get discouraged, otherwise, you'll miss the next bull market."- the GOAT William O'Neil
Bear markets create great opportunities to trade and invest. Make sure you are not financially and mentally exhausted when it is time to catch the next bull market.
How? By taking gains, cutting losses and then doing nothing until stocks set up again.
If you are holding stocks during a bear market that have corrected 25%-80% or more, ask yourself "why?". Why give up your gains? Why lose more? Just because you "love a company"? The company will not reward you for your loyalty, remember that.
Here is some math: a 50% loss requires an 100% gain just to break-even! The more you let your stocks drop, the harder it is to come back. Keeping losses at a minimum, keeps you in the race. It means you'll have the capital to invest when things are working again.
That's why cash reigns king in bear markets. Being out of stocks during corrections allows you to think clearly, avoid anxiety and focus your time and energy trying to research and locate the next big leaders before the bull market starts. Will I play dead and wait for the bear to go away? Or will I stubbornly try to fight the bear head on? How many people took a half decade or more to recover because they didn't listen to market in 2008?
Nobody knows when this bear market will end. 2022 has not seen a true bull run yet. But when it does end, and it will, be ready.
(Not financial advise. I realize a lot of people are already down a lot and it might be too late to implement keeping losses small. In those cases, you may need to consider your next moves carefully. Still, the bear market does not announce when it is over and losses can continue to grow even more. Something to consider.)
#possibilities #whynot #growth #longterm #futurefocused #everylittlebitcounts #learning #publiccommunity #techstocks #learningandgrowing #riskmanagement #bearmarket
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