I'm not rich either and had absolutely no idea about shares, so figured I should learn and am now reading "Investing In Shares For Dummies" - UK Edition. I know it's a For Dummies book but as I really knew nothing I had to start somewhere. It's been pretty good so far - particularly highlighting the difference between speculating (trying to get rich quick / gambling) and aggressive and cautious investing (where you expect returns in 2 - 5 years).
In the chapter on bear markets (downward markets) the advice is:
- Keep your money safe - use interest bearing vehicles such as bank and building society accounts (hmm, really, didn't people lose money in those?), National Savings certificates, or guaranteed income bonds.
- Stick to necessities - get shares in stuff people always need, like food.
- Use trailing stops.
I guess once the market HAS crashed if you're sure which shares are way below value simply because of the crash you could buy those and wait until the market returns to normal?
Just make sure your reading material matches your expectations. They're going to ultimately teach you the "buy low, sell high" basics. And that's fine if you are just hobbying.
What other folks in this sub-thread are talking about - shorting, puts, calls, futures, speculating against commodities and treasuries (not just buying them)... these are what the pros are doing and probably not going to be covered in 'for Dummies'.
Whether or not you'll make/lose more money with one or the other is beyond scope here...
In the chapter on bear markets (downward markets) the advice is:
- Keep your money safe - use interest bearing vehicles such as bank and building society accounts (hmm, really, didn't people lose money in those?), National Savings certificates, or guaranteed income bonds.
- Stick to necessities - get shares in stuff people always need, like food.
- Use trailing stops.
I guess once the market HAS crashed if you're sure which shares are way below value simply because of the crash you could buy those and wait until the market returns to normal?