Best Equity Funds To Make Money From Investing In A Bad Stock Market

Best Equity Funds To Make Money From Investing In A Bad Stock Market

A person can make money by investing in stocks or equity funds (stocks) in a good stock market - but few of them earn money from investing in a bad market

A person can make money by investing in stocks or equity funds (stocks) in a good stock market - but few of them earn money from investing in a bad market. If 2014 and/or 2015 are ugly, there is little 'secret' about the best equity funds you should know if you are into equity investing.

She participated in the recent CNBC International Equity Investing Competition and beat 99.9% of the competition. It was late 2011, and the field of competition involved nearly half a million investment portfolios (trying to win the first prize of $ 1 million). The market took a hit, and that's what I was betting on ... so I uploaded the best stock funds available at the time. The secret: You cannot make money investing in stocks (stocks) by trying to pick winners in a bad market. You are making money by betting against the market. And this is what she did, taking advantage of all the financial leverage that the competition would allow.

With the market rising by nearly 150% since its 2009 lows, 2014 and 2015 could pose problems for equity investing and investors who believe they can pick winners. In the bear market, the vast majority of stocks are declining and yesterday's biggest winners are the day's biggest losers. interval. The good news is that the betting process against the market these days is simpler than ever. 

Then the best equity funds to make money from investing in stocks in a bad market are available to you at a cost of about $ 10 to trade.

These best equity funds are called "reverse equity" funds. Simply put, they are index funds called ETFs (ETFs) and trade just like any other stock. To wet your feet, I'll give you an example. The SDS symbol is a bet that the market (as measured by the S&P 500 Index, which represents the 500 largest reputed companies in America) will depreciate. If the stock market (S&P 500) falls 1% on the day, then the SDS should rise 2% (reverse leverage 2 to 1). If the market overall decreases by 50% in 2014 and / or 2015, the price of SDS should rise by 100% (double).

During the Great Depression of the 1930s, some investors became rich with the market crash. In 2000-2002 and again in 2007-2009, the market collapsed and some people got rich by "short selling" or taking a "short position" by betting on the market. Today, taking a short position has become easier than ever and even an ordinary investor can do this using reverse equity ETFs. You can simply buy it and hope for a downturn in the stock market. After that, she tries to set the time so that she sells it to make a good profit if that happens. In the old days, the short-selling process was more complicated.

Most of the time, investing in stocks is profitable, but it gets ugly every few years. You will never earn money from investing in stocks on a consistent basis. Nobody does that, and even the best equity funds looking for the best companies to own are not coming close ... because they are designed to bet the upside. When the tide ebbs on stocks, at least 90% of the shares traded are losers. If you want to beat the stock market, you need to know when to hold it and know when to fold it. If you really want to make money investing in stocks, you also need to know when to sell them.

These best equity funds for a bad market (reverse equity funds) are not for regular investors who are passively investing money for retirement. These are just the best stock funds for those who want to actively play the stock market game (simply) to do their best. Investing in stocks is a big part of the game if you really want to invest your money in business and make it grow. If you can make money investing in stocks in bad years, you will be well on your way forward. But this will require some time and attention on an ongoing basis.

Looking back at 2014 and 2015, I think the party may be over. If you are investing heavily in stocks versus safe bonds and investments, I suggest taking some money off the table. If you want to be more aggressive and try to make money from investing in stocks in what could be a bad market, I suggest trying inverted equity funds. The leverage they provide is 2 or 3 to one. You can get more leverage than that with stock options called PUTS, but it can be riskier... because here you pay a premium for time and eventually expire on a certain date and can become worthless.

What I call the best equity funds for the bad stock market does not expire. They are simply equity index funds on steroids that move against the price in the stock market in general. I suggest you start experimenting with SDS before you try to make money by investing in a "short" part of your investment strategy for 2014 and beyond. If you find that you are not comfortable playing the sell-side - you can always sell in and out.