How You Can Safely Invest During a Bear Market

During a bull run, any investment makes us look like Warren Buffet, but what happens when the market inevitably turns south, as experts are predicting for this year?

Of course, it's never a good idea to panic and sell your investments, but you should prepare yourself to navigate the stock market when stock prices are dropping. So where should your money be?

The Cycle Continues

Many new investors will hear the phrase “timing the market,” meaning you should buy stocks at their lowest price and sell at their highest prices.

The first piece of advice for any serious investor is to understand that you nor any other investor can accurately time the market.

Scot Johnson (CFA, Principal & Chief Investment Officer) of Adell, Harriman & Carpenter Inc. notes, “Investors, whether professional or part-time, would be wise to avoid thinking they can accurately and consistently predict the onset or the end of recessions and bear markets.”

Scot says that bear markets are simply an inevitable part of the natural economic cycle. So instead of attempting to time the market, investors should focus on “quality” investing from the start.

Part of Scot's investment strategy is to find shareholder-friendly companies. Companies that pay regular dividends and raise their payouts consistently would fall into this category.

To further bolster a high-quality portfolio, Scot recommends investing in companies that provide “necessity” goods and services as these tend to be more resilient during poor market conditions.

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