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1.
During a bear market, _______.
A particular type of investment performs poorly. Investments lose money during a bear market. Not all bear markets are marked by rising inflation or recession.
2.
During a recessionary period, what usually holds up well?
Health-care stocks. Stocks of companies that produce must-have products, such as drugs or food, tend to do best during recessions. Those investments dependent upon a healthy economy, including junk bonds and cyclical stocks, tend to do poorly.
3.
How do bear-market funds aim to make money during bear markets?
By shorting assets. By shorting assets in certain classes, bear-market funds aim to do well when the market heads south.
4.
What's perhaps the best way to bear-proof a portfolio?
Build a diversified portfolio that owns a little bit of everything. Timing the market by moving to cash rarely succeeds, while bear-market funds will lose money during a bull market.
5.
The investments that perform poorly during bear markets tend to be the same ones every time.
False. Each bear market attacks in different ways. Certain sectors tend to be hit harder in different ones.
