17/09/2024 | 4 Comments

The stock market is of great importance for investors who look forward to growing their money over time. However, the stock market does not always rise, as it goes through ups and downs, which are often called bull and bear markets. The more you understand these trends, the better choices you can make with your investments.

In this blog, we will learn what is a bear market and investment strategies to survive in a bear market. Read on to also learn how P2P lending can serve as an alternative investment when you are going through a bear market.


What is a Bear Market?

When the prices of stocks in the market fall drastically over time, then it is called a bear market. It usually happens due to a weak economy or bad news about companies. It is called “bear market” as the name comes from the way a bear attacks, which is hitting its paws downwards. It refers to stock prices dropping in the market. These are the times when investors become extremely careful and eventually try to sell their stocks to avoid losing money. Though a bear market is temporary, it could last for several months or even years.


What is Bullish and Bearish?

The words “bullish” and “bearish” are used to describe the investors and how they feel. If an investor is bullish, then it means they believe the stock prices would rise and they are likely to buy stocks to register a profit. On the other hand, if someone is bearish, they expect prices to fall and may sell their stocks to avoid losses.


How to Invest in a Bear Market

Here are the best tips to consider before you invest in a bear market. With these, you can certainly make the best of the situation:

  • Be patient and do not panic if the market drops.
  • Keep in mind that bear markets do not last forever. So, keep your focus on long-term goals rather than worrying about short-term drops.
  • Some strong companies may have lower stock prices during a bear market. This could be a good time to buy their shares.
  • Diversify your investments and spread them across various types of stocks.

How to Invest in a Bear Market


Investment Strategies to Survive in a Bear Market

The best investment strategies to survive in a bear market are as follows:

  • Rupee-Cost Averaging (RCA): One of the most popular investment strategies, RCA allows you to invest smaller amounts regularly. This way, you buy more stocks when prices are low and fewer when prices are high, which lowers your overall cost.
  • Invest in Defensive Stocks: Some sectors, like healthcare, utilities, and basic goods, do well even during bad times.
  • Look for Dividend Stocks: Some companies pay dividends, which means you get paid even when stock prices fall. These stocks can help you earn a steady income while waiting for the market to recover.


Also Read: Stock Vs Real Estate


Peer-to-peer (P2P) Lending as an Investment Alternative

When you are going through a bear market, traditional investments like stocks may not perform well. This is where P2P investment comes into the picture. P2P lending would allow you to lend money directly to people or small businesses and earn interest in return. With P2P lending platforms like 13Karat, you can earn returns of up to 13% per annum through P2P-enabled investment options.

Moreover, here’s why P2P lending can help you during a bear market:

  • Unlike the ups and downs of the stock market, P2P lending can provide more consistent returns.
  • By adding P2P loans to your investment mix, you make your overall portfolio safer.
  • Many P2P loans are short-term, which means you can get your money back sooner.
  • P2P lending often offers higher interest rates compared to savings accounts.


Also Read : Complete Guide to P2P Lending


Conclusion

Getting through a bear market can be tough, but if you have the right strategies and a clear plan, then it is certainly possible to survive the bear market.

If you are looking for a great option during uncertain times, then download the 13Karat app. The app offers short-term investment plans for 3 months investment plan and 6 months with returns of up to 13% per year.

Get started with this simple and smart way to grow your money, even when the stock market isn’t doing well.