A common misconception among stock-market novices is that you can only make money in a bull market. Or, maybe you can make money in a bear market, but you have to find stocks that are going against the trend — which is very difficult to do.
Short selling allows you to make money when a stock goes down. Instead of the old “buy low, sell high” strategy, short selling allows you to sell high AND THEN buy low — that’s right: you can sell stocks you don’t even own! Sound crazy? Well you’ll learn all about it in this video.
In this episode, you will learn:
- The basics of short selling: how you can “borrow” shares you don’t own, sell them on the open market, get the money for the sale, and then later return the shares you borrowed — hopefully buying them at a lower price.
- How to identify good stocks to short — what technical and fundamental indicators you should cross-reference before placing your first short-sell order.
- How to place a short-sell order with your online broker — it’s easy!
Included in this video are charts and other graphics helping to illustrate the short-selling concept. We look at how stocks tend to go down much faster than they go up, go through an example of how short selling works, and show you a screen shot of me placing a short-sell order with an online broker.
In fact, because stocks do tend to go down faster than they go up, bear markets can be great opportunities. So instead of thinking you can only make money during a boom, perhaps you’ll be crossing your fingers for another stock-market bust after watching this video.
CEO, Wealthpire Inc.