This is a FullyInformed Members article. With the stock markets sitting at all new highs and now entering a corrective phase, investors worry about the next bear market. Indeed from the stack of emails I have been receiving, many investors are worried that the next great bear market may be just around the corner. To that end let’s look at a few signals every investor can watch for that will alert them when they should prepare for the arrival of the great bear.
One of the best things to do is to study past bear markets and see how they got started, what the warnings signs were and when was the best moment to exit. While it would be nice to exit at the top of a market, that possibility is pretty small for most investors because it takes time to spot a true bear market and not just another correction. Once we have the knowledge to know how to spot the next bear market we can step aside, buy Spy Put Options, Ultra-short or hedge ETFs like HDGE and enjoy the profits on the way back down. Don’t worry, as you will see, there are lots of warning signs and signals allowing plenty of time to vacate the stock market and trade the short side.