Trading,Bear,Market,with,Your, finance, share, loan Trading in a Bear Market with Your IRA Account


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The tax code has discouraged trading during bear markets in IRAs.  Shorting stocks has not been allowed.  Even in regular accounts trading in bear markets has been discouraged. During huge market falls,  up tick rules prevent short sales.  After 9/11,  and the recent bank debacle, many journal articles described shorting the market as being un-American.In the market crash of 2008, most investors had only two options - lose most of your equity praying the market would reverse, or not participating by sitting on the sidelines.  Unfortunately, most people just rode the market down, hoping for a bottom.Over the past 10 years,  the market has been in a down trend.  Most investors in mutual funds have seen their assets dwindle.  Fortunately, however, the SPXTimer has been bearish during the times when one should be bearish, and bullish when the market was bullish.   The difference in results is stunning.The rules for success in a bear market are the same as those in a bull market:   
  • Use a good market timer, like the SPXTimer, to provide an unbiased appraisal of the market direction.
  • Never trade against the market direction
  • Include Money Management as a central component of your trading strategy
  • You must have the discipline to follow your plan
Here are two very successful bear market strategies; both are permitted in IRAs.The first bear market strategy employs Inverse ETFs. These funds move in the opposite direction as the market. Consider the Exchange Traded Fund (ETF) called SDS.  SDS is a leveraged inverse ETF for the S&P 500. In a bear market, when the S&P 500 is decreasing in value, SDS increases in value - it moves inverse to the market direction.Most of the broad-based indexes have inverse ETFs. They are traded and reported just like other ETFs and stocks. Most of the popular broad-based inverse, index ETFs have excellent liquidity.The second bear market strategy, Depth Charge - Options,  trades baskets of stock option puts. It only risks 10% of your total investing equity. This video will detail the components of this conservative strategy.  Click here to see this incredible trading strategy video.Previous articles that we have published that you might find interesting:
  • Elements of a Safe, Simple Winning ETF Strategy: Market Timing, Money Management and a Little Bit More
  • Does 'Buy & Hold' still work as  an investment strategy?
  • Money management rules explained
  • Trading a market timer is not for wimps; Following the plan

Trading,Bear,Market,with,Your,

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