Navigating a bear market isn’t easy — here’s how to protect your finances.
Transcript:
MICHELE SCHNEIDER: Well, in terms of a bear market, we actually are in a bear market. Depending on your definition, we use a definition of using two moving averages, the 50 and the 200. And when the 50 day moving average crosses below the 200 day moving average, and the actual price is trading below both of those moving averages, that is the classic bear phase. Charles Dow talked about that back in the 1800s. So as far as we can see, we’re there in the SPY’s and the Q’s and the Russell’s and many of the sectors. So the good news about bear markets is we know they eventually end because optimism we’re hopeful people right. So optimism starts to come back in. But we haven’t seen that yet. So I would say, don’t be too tricked by this to think that the band market is over until we see actual signs that the indices and sectors can get back over that 50 day moving average, and then we can start talking about bear over recuperation here.
And how to navigate it would be. First of all, it’s really great to look at things that are going counter. So while we have a lot of things in a bear market, there are certain things that have been outperforming. We just talked about commodities earlier. That would be one particularly gold and silver. Copper is trying to get in the game now. A couple of other commodities are looking good. The grains and the other would be looking at something like emerging markets. Because if you look at the China market versus the spy market, that’s been bouncing and breaking out, as opposed to the spy, which has been basically coming down, having bear market type rallies and then going back down. So again, if you think there’s some kind of a low in place, if people are looking at April 9th as the low, that would be 4,800. One thing is if we break down under there, we’re going much lower. But we could also chop for a long, long time before we see something more substantial in the way of a sustained rally.
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