The Best Thing About a Bear Market

Relief rallies are the hallmark for the bear market we are currently in.

These rallies are the best things for traders because they can be sharp.

How sharp?

Get this… Bear market rallies can eclipse 20%.

Yes, there have been many double-digit rallies within longer bear markets.

If that is not enough to suck in even the most cautious investor, I don’t know what would be.

We’ve seen plenty of bear markets in the past.

And each one follows a similar pattern.

First, the market falls a bit and investors buy.

Next, the market rallies and investors buy more.

Then it crashes and they sell.

But then it rallies again and they buy again.

Then it crashes again and they sell again.

Then it rallies and they buy less.

Then it crashes and they sell.

Then it rallies yet again. This time, they don’t buy as much.

It crashes.

They sell again, thinking they’ve figured it out.

Nope, it rallies. But this time they don’t buy.

Then it doesn’t crash for 7 years.

Oops. They just missed the entire rally.

So what’s the answer?

The answer is not to pretend you know more than the market. The answer is to invest in companies you understand and want to own – and then to buy more when the markets crash.

People make money in bull markets. But bear markets make people rich.

Bear markets allow you to buy companies at their absolute lowest valuations. Like in 2008 and 2009, when you could have bought Bank of America (NYSE: BAC) for $5, JPMorgan Chase (NYSE: JPM) for $20 and Apple (Nasdaq: AAPL) for a fraction of what it trades for today.

Bull markets make you pay up. And when the music stops – as it does every few years – you’re left standing without a chair. Not a good feeling.

That’s not to say that even the best investors don’t lose money in a bear market. They do. The goal is to not lose it all so you have enough in reserve to make money on the other side.

Bear markets are also great for trading, and that is where my colleague Bryan Bottarelli excels. Just today, he closed out two winning trades while the market was down more than 800 points. That takes skill.

Action Plan: There are opportunities in every type of market, but the biggest and best opportunities come when the market is at its worst. This is what makes The War Room so powerful. When the markets are down, we help members get in at the right time. And boom – massive gains can come in overnight! In fact, we had an 81% win rate in May. And we’re guaranteeing new members will receive 322 winning trades in their first 12 months.

Isn’t it time you joined The War Room?