How to adjust a portfolio in different market sentiments

How to adjust a portfolio in different market sentiments

If an investor invests for a long time, there are very less chances that he will feel the pressure if there is a bear market and even if it is the case then he doesn’t have to completely sell his stocks instead he can make a few tweaks and that can help cushion losses. This is not only for large investors and therefore even the smallest of individual retail investor can apply the same logic and tweak only a few things and survive the bear market. Bull or Bear, both markets will take place one or the other time in turns and therefore I will explain a few tweaks on how to adjust your portfolio based on a Bear or Bull Markets.

Market Conditions:

There are two noticeable conditions in the stock market that is a bull market and the bear market. Therefore they repeat in cycles over and over. Understanding the different conditions will therefore help an investor to plan his investments accordingly. Bull market is typically when the stock prices surge on the index for almost 20%. Wherein all the investors are optimistic and the trade volumes are a lot higher than normal whereas in the bear market it is exactly opposite where the investors are pessimist and the trade volumes are stagnant and the investors feel a lot demotivated and therefore one needs to be aware of these types of markets and plan according to its early behaviors.

Adjust for a Haywire Bull:

Given that the market is optimistic, the investor should consider taking risky decisions and loading more stocks and there might be certain sectors which would perform better than the other like the commodities producers or the energy sector. Wherein they all do better when the economy is cooking. Over weighting them through various sectors is a good idea. People even plan on investing in emerging markets then their own country courses even though they might be risky. But a smart investor would track them through their indexes of equities and decide on their plans.

Adjust for a Bear Sprint:

The market is really pessimist. The investor lose their confidence and therefore they always revert to a safe haven during this period such. They trade in government bonds since they are less likely to lose money. Since government bonds yield a fair return from their day to day operations. Another option is to turn onto blue-chip companies since they are better equipped to handle such market sentiments. Also they provide higher yields during this economy. Moreover also acquire small companies and offer lower volatility.


Adjusting a portfolio according to market sentiments is a tough job. But a few tweaks can help face any type of market be it bull or bear. Therefore tracking investment can help reduce the risk and or any catastrophic losses or even them good returns.


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