| When stocks are bullish that is, when prices of | | | | shareholders in a recession? Generally speaking, |
| the stock market in a steady rise it is pretty | | | | those that are tied to fundamental basic |
| easy for anyone to make money on Wall Street. | | | | necessities of life. We may not buy designer |
| Studies have any shown that in certain kinds of | | | | jeans and sports cars during a bear market, but |
| easy-money markets, novices did just as well as | | | | we still buy heating oil and we still use electricity |
| pros when it came to picking hot stocks and | | | | to light our offices and homes. So utility company |
| reaping fast profits. But the veterans of the | | | | stocks generally fare well during bear markets, as |
| stock market game say that the real test comes | | | | do companies that sell other basic commodities |
| when there is a bear market and stocks fall into a | | | | like gasoline. Gold and silver and other precious |
| general slump. Those who can make money | | | | metals are also a good choice for a difficult stock |
| under those conditions will gain the respect of | | | | market season, because when people are |
| even the most seasoned investors. But to do it | | | | nervous about the future of the economy, they |
| requires patience, research, and discipline. | | | | tend to invest in things of universal value, like gold. |
| Picking the right stock for the economic climate is | | | | It provides a sense of security, because if all else |
| not impossible, however. One way to get a handle | | | | fails to attract consumers, gold will still glitter and |
| on which stocks will perform best during a bear | | | | be considered an item of special value and |
| market is to look at the overall picture of how | | | | significance. And if you buy gold before the bear |
| the stock market behaves. Usually bull markets | | | | market sets in, you can probably sell it for a |
| are periods that also see a strong manufacturing | | | | profit once the demand for it increases. |
| sector. Houses are built, cars are manufactured, | | | | In summary, stocks that provide a sense of |
| and goods like appliances and clothes fly off the | | | | stability and security through ownership of those |
| shelves. The companies that make and sell those | | | | basic necessities of life are usually a good place to |
| consumer products do well, and those who buy | | | | invest during a bear market. And buying stocks |
| their stock to share in that success drive stock | | | | whose prices have fallen to bargain basement |
| prices higher. But when the party is over and | | | | prices is also a smart strategy. Many perfectly |
| inflation kicks in, we begin to budget our money. | | | | good stocks with underlying value and strong |
| Sales volume declines, and many factory workers | | | | earnings get dumped when people pull their |
| find themselves out of work as consumer | | | | investments away from the stock market en |
| demand slackens. As wages stagnate, so do | | | | masse. Those who are patient can buy these at |
| purchases of high priced items like cars and | | | | wholesale or below wholesale prices, and then |
| homes, and this helps to accelerate the decline of | | | | watch their purchases rise in value once others |
| the stock market. | | | | realize that these stocks are good buys. When |
| But those who buy stocks that perform well | | | | the stock market begins to climb again, those |
| even in this kind of economic recession the | | | | stocks that are undervalued will rise quickly and |
| stocks known as recession-proof stocks can | | | | you will be left holding winners that you bought at |
| usually do relatively well, even during sluggish bear | | | | deeply discounted prices. |
| markets. Which stocks continue to reward | | | | |