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How to Invest in a Bear Market: 5 Tips to Boost Returns

Keep reading for a few tips to help you learn how to invest in a bear market and still make money. Let’s get started.
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Investors are bracing for the worst as the market continues selling off, and talks of a recession are rising. If you wish to boost your returns this year, learning the ins and outs of how to invest in a bear market is a good place to start.

Stocks are in a bear market when major indexes fall over 20%. For example, the pandemic was the last time it happened, causing the SPDR S&P500 Trust (NYSE: SPY) to fall over 35% from its ATH.

The fallout was short-lived as the Federal Reserve (Fed) eased policies to support the economy. Will this time be different?

With inflation up 8.3% in the past year, the Fed is changing its pro-growth policy stance to focus on calming the overheated economy. Furthermore, the tension in Ukraine is heating up as nations continue proposing sanctions to dampen Russia’s ability to raise war funds.

Analysts are predicting a global economic slowdown as a result. There has never been a better time to get defensive between slowing economic conditions and the rising price of goods. Keep reading to learn how to invest in a bear market and get your portfolio back in the green this year.

How To Invest in a Bear Market and Still Make Money

Bear markets are a natural part of the financial system and can happen anytime. Although they are typically short-lived compared to bull markets, they can wreak havoc on your portfolio. Learning how to invest in a bear market can help protect your account from significant drawdowns while boosting returns over time.

In bull markets, growth opportunities are abundant. But, in a bear market, the chances of finding quality growth stocks are much more difficult. Therefore, it’s important to follow a set of rules to keep you focused and grounded during the panic. Below are a few tips to help you learn how to invest in a bear market and still make money.

No. 5 Reassess Your Conviction

With many stocks already down 30, 40 and 50% from their highs, it may be a good time to rethink your investments. Go through your portfolio and consider if you still feel the same way about the company now as when you bought it. Ask yourself…

  • Why did you invest in the company in the first place?
  • Do you feel the same as when you first invested?

If you do, the stock is likely worth holding. Bear markets are not forever. Then again, it would be best if you also consider your investment goals and time horizon. If you are a long-term investor, giving the market time to bounce back will help multiply returns in the long run.

If you bought the company on a whim or heard it was “going to the moon,” now may be the best time to reconsider. Does the company still have the ability to grow and generate earnings?

These are just a few questions to ask yourself when learning how to invest in a bear market. Focus on companies with strong free cash flow and a history of paying dividends.

No. 4 Buy Leaders

In the stock market, leaders tend to lead. In other words, companies with solid cash flow, bulletproof balance sheets and the ability to generate earnings.

More important, market leaders with pricing power (the ability to raise prices without significant loss of demand) are best positioned for long-term growth. A few questions to ask yourself…

  • Is there a better substitute?
  • With less income to spend, will consumers still buy it?

If there are better or cheaper alternatives people will buy instead, you might want to avoid it. Otherwise, if there are no better alternatives and consumers will continue spending, it sounds like a long-term leader.

Keep reading to learn more about how to invest in a bear market.

No. 3 Cash Is King

In a bear market, if you answered “Yes” to either question above, you may want to park your money somewhere else. For instance, holding cash allows you to purchase when the time is right. Furthermore, you can set price targets and average down if you plan to do so.

Holding cash in a bear market is better than owning a company with no solid plans for future growth. Otherwise, setting price targets for buying leaders can help create maximum long-term returns. Other than the obvious holding cash, looking for companies that generate earnings with strong cash flow can also help in a bear market.

No. 2 Don’t Put All Your Eggs in One Basket

The old saying “don’t put all your eggs in one basket” comes from an ancient proverb, suggesting you risk dropping it and losing everything if you do. You can apply the same meaning to the stock market.

Investing all your money in one stock or asset risks losing everything if something goes wrong. Instead, buying leaders in different markets can help cushion downfalls and provide even greater upside. For example, if your portfolio heavily favors tech stocks, investing in consumer defensive stocks such as Walmart (NYSE: WMT) will diversify your account.

No. 1 How to Invest in a Bear Market: Be Patient, Stay Calm

The first rule for investing in a bear market is to stay calm. With this in mind, the last thing you want to do is panic sell and miss out on long-term returns.

Learning how to invest in a bear market is no easy task. In particular, every bear market is different. These markets can appear out of nowhere, lasting days to years, and can produce significant losses.

However, if you go into it with a plan, it can be an opportunity to accelerate long-term returns. If you stay patient, wait for good entry points and buy leaders, history has shown us the market is in your favor in the long run.

Lastly, bear markets are not known to be long-lasting. According to recent research, the average bear market lasts 9.6 months while bull markets last 2.7 years. In other words, if you are a long-term investor, keep your sights set on more significant returns in the long run. Now is the chance for you to adjust your portfolio for optimal growth going forward.

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Economics

Expert on Bath & Body Works: ‘an easy double the next three years’

Bath & Body Works Inc (NYSE: BBWI) might have been painful for the shareholders this year, but the road ahead will likely be a rewarding one, says…

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Bath & Body Works Inc (NYSE: BBWI) might have been painful for the shareholders this year, but the road ahead will likely be a rewarding one, says the Senior Vice President and Portfolio Manager at Westwood Group.

BBWI separated from Victoria’s Secret

The retail chain separated from Victoria’s Secret in 2021, which, as per Lauren Hill, clears the way for a 100% increase in the stock price in the coming years. On CNBC’s “Closing Bell: Overtime”, she said:

[Bath & Body Works] has really strong pricing power. They have 85% of their supply chain in the United States and with the Victoria’s Secret brand now gone, I think it’s a wonderful buy; an easy double the next three years.

Last month, the Columbus-headquartered company reported results for its fiscal first quarter that topped Wall Street expectations.

Bath & Body Works is a reopening play

The stock currently trades at a PE multiple of 6.64. Hill is convinced Bath & Body works is a reopening name and will perform so much better as the world continues to pull out of the pandemic. She noted:

Customers have missed buying their scented products in store and as their social occasion calendars fill up, they are getting back out there and buying more gifts, including Bath & Body Works products.

Hill also dubbed BBWI a great pick amidst the ongoing inflationary pressures because of its reasonably priced products. Shares are down more than 50% versus the start of 2022.

The post Expert on Bath & Body Works: ‘an easy double the next three years’ appeared first on Invezz.

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Economics

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Authored by Naveen Anthrapully via The Epoch Times,

A…

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Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Authored by Naveen Anthrapully via The Epoch Times,

A majority of C-suite executives are considering leaving their jobs, according to a Deloitte survey of 2,100 employees and C-level executives from the United States, Canada, the UK, and Australia.

Almost 70 percent of executives admitted that they are seriously thinking of quitting their jobs for a better opportunity that supports their well-being, according to the survey report published on June 22. Over three-quarters of executives said that the COVID-19 pandemic had negatively affected their well-being.

Roughly one in three employees and C-suite executives admitted to constantly struggling with poor mental health and fatigue. While 41 percent of executives “always” or “often” felt stressed, 40 percent were overwhelmed, 36 percent were exhausted, 30 percent felt lonely, and 26 percent were depressed.

“Most employees (83 percent) and executives (74 percent) say they’re facing obstacles when it comes to achieving their well-being goals—and these are largely tied to their job,” the report says. “In fact, the top two hurdles that people cited were a heavy workload or stressful job (30 percent), and not having enough time because of long work hours (27 percent).”

While 70 percent of C-suite execs admitted to considering quitting, this number was at only 57 percent among other employees. The report speculated that a reason for such a wide gap might be the fact that top-level executives are often in a “stronger financial position,” due to which they can afford to seek new career opportunities.

Interestingly, while only 56 percent of employees think their company executives care about their well-being, a much higher 91 percent of C-suite administrators were of the opinion that their employees believe their leaders took care of them. The report called this a “notable gap.”

Resignation Rates

The Deloitte report comes amid a debate about resignation rates in the U.S. workforce. Over 4.4 million Americans quit their jobs in April, with job openings hitting 11.9 million, according to the U.S. Department of Labor. In the period from January 2021 to February 2022, almost 57 million Americans left their jobs.

Though some are terming it the “Great Resignation,” giving it a negative connotation, the implication is not entirely true since most of those who quit jobs did so for other opportunities. In the same 14 months, almost 89 million people were hired. There are almost two jobs open for every unemployed person in the United States, according to MarketWatch.

In an Economic Letter from the Federal Reserve Bank of San Francisco published in April, economics professor Bart Hobijn points out that high waves of resignations were common during rapid economic recoveries in the postwar period prior to 2000.

“The quits waves in manufacturing in 1948, 1951, 1953, 1966, 1969, and 1973 are of the same order of magnitude as the current wave,” he wrote. “All of these waves coincide with periods when payroll employment grew very fast, both in the manufacturing sector and the total nonfarm sector.”

Tyler Durden Sat, 06/25/2022 - 20:30

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Spread & Containment

Optimism Slowly Returns To The Tourism Sector

Optimism Slowly Returns To The Tourism Sector

Coming off the worst year in tourism history, 2021 wasn’t much of an improvement, as travel…

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Optimism Slowly Returns To The Tourism Sector

Coming off the worst year in tourism history, 2021 wasn't much of an improvement, as travel remained subdued in the face of the persistent threat posed by Covid-19.

According to the United Nations World Tourism Organization (UNWTO), export revenues from tourism (including passenger transport receipts) remained more than $1 trillion below pre-pandemic levels in 2021, marking the second trillion-dollar loss for the tourism industry in as many years.

As Statista's Felix Richter details below, while the brief rebound in the summer months of 2020 had fueled hopes of a quick recovery for the tourism sector, those hopes were dashed with each subsequent wave of the pandemic.

And despite a record-breaking global vaccine rollout, travel experts struggled to stay optimistic in 2021, as governments kept many restrictions in place in their effort to curb the spread of new, potentially more dangerous variants of the coronavirus.

Halfway through 2022, optimism has returned to the industry, however, as travel demand is ticking up in many regions.

You will find more infographics at Statista

According to UNWTO's latest Tourism Barometer, industry experts are now considerably more confident than they were at the beginning of the year, with 48 percent of expert panel participants expecting a full recovery of the tourism sector in 2023, up from just 32 percent in January. 44 percent of surveyed industry insiders still think it'll take until 2024 or longer for tourism to return to pre-pandemic levels, another notable improvement from 64 percent in January.

Tyler Durden Sat, 06/25/2022 - 21:00

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