Sometimes it can make sense to sell in a bear market. Say you like a stock (A) that you have following better than a stock (B) you have. If you sell stock B in bear market you will have lower capital gains or higher capital loss that selling in a normal or high market. If you buy stock A in a bear market you will be paying a lower price than in a normal or high market.
The kicker is that you would be better off doing this transaction in a bear market. Stock tend to trade relatively at the same price ratio. Say stock B trades about 10% lower than stock A. If in a bear market stocks fall 40%, all stocks tend to fall 40%. In a bear market 10% of the lower figures is less than it is of a higher figure. So, in absolute dollar terms you are ahead in doing the trade in a bear market.
On my other blog I wrote yesterday about CI Financial Corp (TSX-CIX, OTC-CIFAF) ... learn more. Next, I will write about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF) ... learn more on Wednesday, June 26, 2019 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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