The four simple steps that will help you survive this bear market

The four simple steps that will help you survive this bear market
1. Keep your confidence: In the first place, you were confident that the stock market will make money for you by investing correctly. That attracted you. Do not underestimate the importance of keeping a strong mind during these downtrends. I used to be discouraged and think that we would never see an uptrend again.
Now, I am highly encouraged because I know with 100% certainty that we would end this downturn with a brand new uptrend now or later. The key here is to keep your mind at rest so that you can take advantage when we see a healthier market conditions.
2. Have a watch list: A watch list in stock market investment contains those you are targeting to buy for one reason or the other. The attraction might be the price, the earnings performance, volume traded or other intrinsic values. When the market starts a new uptrend, it is important to be ready to jump on the strongest stocks out there and make money. Many stocks are undervalued in the market today, hence the need to select those that should be on your watch list.
3. Keep few positions: During a down-market, keep few stocks in your portfolio for effective monitoring and revaluation. If you are used to buying shares of 20 to 30 companies, there is nothing wrong with buying just two or five. One reason is that it allows you to scale into some stocks you might like for longer term. Another reason is that fewer positions help you to deal with higher volatility and protect your capital. That way, you are not exposed to everything that goes by the name of stocks and get cut to death with the wide market fluctuations.
4. Hold cash: Cash is king at all times and in a bear market, it is better to hold cash, not stocks, because three of every four stocks move with the general direction of the market. When the market is going down, even the strongest companies with good fundamentals can get hit. For example, during the 2008-2009 financial crisis, Nigeria Breweries’ share price fell from N120 to N23 each- not because the company’s products stopped selling, but the market’s mood and trend affected its share price. This same company recovered and surpassed its peak; it is now selling at above N140. Avoid holding stocks unnecessarily, so that your hard earned money would not go down with the market. There is nothing wrong with keeping some cash on the sidelines for healthier conditions. You don’t have to invest all your capital in the market at the same time.