How To Profit When The Stock Market Is Down
#1 Invest in Assets that do well in Deflation
Assets that do well in deflation are cash and long term US treasuries. It’s better to already have had a portion of your portfolio invested in an All Seasons Portfolio, so that when deflation hits you already have these assets available to counteract the fall in stocks and other inflation assets.
#2 Invest in Quality Stocks or Properties
When the stock market as a whole is down it usually drags down the prices of good quality stocks as well as bad quality stocks. So it’s a good time now to find deals in the market. Stocks that have great technology, or fantastic resources, or necessary services that are just underpriced.
Sometimes you can find good real estate properties during times of deflation. These properties may have good rental cash flow and be in areas that will go up in value over time.
Do some research now while the market is still going down and find yourself some good deals.
#3 Wait for Extreme Negativity in the Market and Buy the Index
The Elliot Wave Theorists say that the end of a bear market is when no one will invest anymore. People have given up on the stock market, and they aren’t even paying attention to it anymore.
They’ve pulled their cash out, if they have anything left, and they are not going in anymore.
That’s the bottom of the market and that’s when you invest.
All the news will say the Stock Market is the worst place to put your money.
There may even be social disruptions, protests, chaos.
At that point, go ahead and invest in the stock market.
#4 Invest in Cash Flow Assets
If your asset loses value but it’s still producing cash, it doesn’t feel that bad now does it? Cash flow assets include savings accounts, CDs, bonds, rental properties, dividend yielding stocks, businesses, and recently I learned about bots that trade crypto for you (who knew right?).
I’m sure there are more cash flow assets out there that you can find and learn about, and it’s important to invest in these types of assets if you want to create financial freedom for yourself.
#5 Stay Balanced With An All Seasons Portfolio
It’s good to take stress out of your investing by investing in a balanced way so that you don’t have to suffer when there is inflation or deflation or economic growth or economic decline. Invest in a way that you profit now matter what is going on. Click here to learn more about the All Seasons Portfolio.