Some are calling the rally we have seen since the start of 2012 a bear trap, an insignificant bounce that will soon lose momentum and drive our markets down further. Extreme skeptics are even predicting that we will see a stock market crash in 2012 similar to that of 1929. Do I believe it? Not really, but I’m prepared for the worst, and you should be too.
The success of great investors generally isn’t due to an ability to predict market movements with 100% accuracy. Rather, their success is generally attributed to preparation; having a plan for any market condition. This series will outline some simple strategies that will help you prepare as the great investors do: First, by protecting investment capital, then by making money in the event of a significant bear market.
Protecting investment capital should always be first priority when investing, especially in potentially tumultuous markets. August, 2011 taught us this lesson once again. Many unprepared investors saw their portfolios fall 10%, 20%, or more within a just a few days. The prepared investor, however, was likely stopped out of his position within the first 5% of the fall, saving himself from the significant loss felt by many others…
Read the full series:
- How To Profit From A Stock Market Crash, Part I: Protect Investment Capital
- How To Profit From A Stock Market Crash, Part II: Inverse Equity ETFs
- How To Profit From A Stock Market Crash, Part III: Gold And Related Mining
- How To Profit From A Stock Market Crash, Part IV: Capitalize On Devaluing Currencies