The prudent can still thrive during stock bears. The coming S&P 500 downside can be directly bet on with puts in the leading SPY SPDR S&P 500 ETF. Investors can also use SPY puts to hedge their long stock investments. But since the vast majority of stocks get sucked into bear markets, a far better option is selling investments and parking capital in cash. Cash is king in bears, going beyond preserving wealth.
Investors who wisely go fully in cash early in a bear can literally buy back twice as many shares in their investments after the bear runs its course and cuts stock prices in half. Then they can use this much-larger base to rapidly multiply their wealth in the next bull. And gold is even better, because unlike cash it it rallies as falling stock prices kindle gold investment demand for portfolio diversification.
Just like during the last two cyclical stock bears that cut the markets in half in the early 2000s and again in the late 2000s, Wall Street is going to deny this current selling is a new bear all the way down. Since it earns vast percent-of-assets management fees, Wall Street’s mission is to keep people fully invested no matter what. In order to understand what’s really going on, you have to cultivate contrarian intelligence sources.
Investors who wisely go fully in cash early in a bear can literally buy back twice as many shares in their investments after the bear runs its course and cuts stock prices in half. Then they can use this much-larger base to rapidly multiply their wealth in the next bull. And gold is even better, because unlike cash it it rallies as falling stock prices kindle gold investment demand for portfolio diversification.
Just like during the last two cyclical stock bears that cut the markets in half in the early 2000s and again in the late 2000s, Wall Street is going to deny this current selling is a new bear all the way down. Since it earns vast percent-of-assets management fees, Wall Street’s mission is to keep people fully invested no matter what. In order to understand what’s really going on, you have to cultivate contrarian intelligence sources.
