In a bear market, some investors prefer to increase the amount of cold hard cash in their portfolios.

It may not earn much interest sitting in the bank (because if a recession is imminent, central banks are likely to reduce interest rates to help boost economic growth), but it’s better than losing money by continuing to back stocks which are going down in value.

Another popular investment when stocks are falling is the relative safety of government bonds.

Unlike the falling returns offered by stocks in a bear market, bonds pay investors a fixed amount over a set period. And those issued by major governments are considered “risk-free” – because they can always print money in order to repay their debts if needed.

Investors also take a shine to gold in a bear market. It’s seen as a good store of wealth, because its value tends to rise at least in line with inflation (as opposed to cash in a bank account) – and demand for it from computer companies and jewelry firms isn’t likely to drop precipitously.

Gold’s track record of rising when stock markets fall also encourages investors to head for the yellow metal in troubled times. 🌟

In this guide, we've discovered:

🔹 What a bear market is 🔹 Why it's called a "bear market" 🔹 Bear market history 🔹 Three things to “bear in mind” when investing in a bear market

And that’s it. You now know what a bear market is, why they come about – and how you can respond to one. Whether it's Yogi, Paddington, or Baloo, you can navigate the markets smarter than the average bear! 🐻✨