The automaker bail out plan seems to be dying. I thought at the beginning of the week that the good news of the bail out plan would give the stock market a boost and may end the stock market crash. However, it seems to be impossible now and instead, that will drag the stock market to crash down further.
Are you prepared to invest money during the stock market crash?
Stock Market Crash
Are You Missing The Bottom of Stock Market Crash
I was reading an article on Yahoo that we are often very worried that we may missed the boat to catch the bottom of the stock market crash. That’s the reason why many people would think the market has bottom out and always rush in to buy. However, that always lead to a big mistake as the market continue to crash lower and lower.
That’s a hard earner money that we are losing. Aren’t you feeling upset about it? Definitely, I will be very upset if I am losing money. There is always a quote accompany me while I am trading in the stock market.
Be fearful when others are greedy. Be greedy when others are fearful. ~ Warren Buffett
While everyone thought that the market has bottomed. Greed will control them and that’s the moment we must be very careful. I can feel the greed in myself but I will always remind myself to control my emotion. Do not fall into the trap of greed. It is always NOT a good time to buy LONG in the down trending market.
How to Invest Money during Stock Market Crash
The only way that you can invest money and make money during the stock market crash is SHORTING the market. What is SHORT?
Short means sell at higher price first and then cover back at a lower price later.
In a down trending market or during a stock market crash, one of the fastest way to make money is SHORT. We must recognise this fact in our financial market today. There are still thousands of people are making money while the market is crashing. However, why don’t we do that too?
We have been constantly hearing people saying “Shorting is very risky, do not involve in short”. That’s why we are fearful, we thought we would lose money and therefore we dare not do shorting.
Let’s look back to Warren Buffett’s quote, “Be greedy when others are fearful”, while all other are so fearful about shorting, it is a golden opportunity for us to be greedy. Shorting is the way to invest money during stock market crash.
Now, am I saying that there is no risk in shorting? No, I am not saying that, all investment involve risk. We must always be very careful while we are investing our hard earn money. Before you start to do actual short, technology has offered us a good solution.
We can start doing paper trading to learn about shorting in a stock market simulator (For example, Wall Street Survivor. You can test out shorting and be familiar with it before you actually put your real money, that’s is the way to mitigate and lower your risk. On the other hand, it is also important that you start learning about the stock market and have a good trading method to guide you. I have learned on lots of good technique on Ino TV. You can watch and listen to the worldclass traders on how they make money in the stock market.
Finally, I wish you all the best to your trading journey and let’s start to learn about invest money during the stock market crash now.
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Besides selling short, you can also buy a put option in order to get into a short position. The advantage is that you will leverage more shares than simply selling short and that you will have (in theory) until expiration to go into the money.