Investing Hacks: How to find investment opportunities in a bear market

Moomoo Learn joined discussion · May 7, 2022 05:20

It's hard to say how predictable the market has been after its recent roller coaster ride.

Markets surged on Wednesday, May 4 on the expected and more pronounced interest rate policy, and those gains were unwound by hawkish voices from some Fed officials late Thursday, May 5.

Investing Hacks: How to find investment opportunities in a bear market

Is the bear market near its bottom?

Some investors got caught up in dumping all their holdings, while others stuck to their dip-buying strategy. Being a risk taker or risk averse investor is personal appetite that will cause market divergence and volatility.

"We're finally getting into that point where everything is for sale, regardless of the quality of earnings. And that typically is what happens toward the end of a selloff, not the beginning," said Art Hogan, chief market strategist at National Securities according to Bloomberg.

"When you see this type of broad-based selling across every single sector, assest class, crypto, the future of technology, the quality darlings, that tells me that we are likely closer to a bottom than we are to an additional major correction," said Sylvia Jablonski, co-founder of Definance ETFs according to Bloomberg.

How to find investment opportunities amid a bear market

A rising market brings risks, while a falling market brings opportunities. Whether it's a panic selling at the end of a bear market or a sharp pullback amid a bull market, every stock market crash could signal an entry opportunity.

When panic prevails and stock prices fall precipitously, savvy investors attempt to benefit from the rebound via lapping up quality stocks.

What kinds of stocks are considered quality?

Generally speaking, good stocks include but are not limited to three types.

Growth companies in fast-growing industries

Cash cows in steady industries

Highly prosperous companies in cyclical industries

How do you pick them out? A detailed explanation will be revealed in our latest course:

How to find investment opportunities amid bear markets

Stock picking from sectors/industries to individual stocks is a classic top-down approach. When researching a specific stock, you need to evaluate a company with the help of metric comparisons and tracking.

You might like: Indicators to evaluate financial success of a company

Plus, if you don't have a specific idea of what to buy, moomoo has the right tools to help you decide on stocks.

You might also like: Quick investing guide for newbies: In only 3 steps

For more investment knowledge and trends, go to Learn on moomoo.