How To Invest: A 3-Step Routine For Bull And Bear Markets

Estimated read time 7 min read

As this year’s volatility reminds us, investors need a strategy for handling both bull markets and bear markets. One key to successful stock investing is to make sure you have a sound — and doable — routine for investing in stocks in good times and bad.


Backed by time-tested rules for when to buy, sell and hold, this three-step approach can help you navigate whatever the market indexes do. Depending on current market conditions, you’ll see how these rules and this routine apply to stocks like (AMZN), Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOGL), Microsoft (MSFT) and Apple (AAPL).

The routine below walks investors through three basic steps to help you grow and protect your money. And you’ll find the screening tools and stock lists you need to quickly and confidently follow those steps.

Investing in stocks based on sound rules and stock ratings will help you stay profitable, protected and prepared in any market environment.

Find And Track The Best Stocks To Buy And Watch

This three-step process also helps you track and handle strong market uptrends, as well as bear markets, choppy periods, and times of sector rotation, During bullish as well as bearish cycles, growth stocks, tech stocks, energy plays, retailers, industrials and other sectors will come in and out of favor on Wall Street.

One key to gauging strength or weakness in the stock market indexes and individual stocks is to see how they behave around their 50-day and 10-week moving averages. Are they finding support or hitting resistance?

While checking the general stock market trends, be sure to also track chart patterns in individual stocks as part of this routine. This helps you identify potential buy points and buy zones for potential and recent breakout stocks. Watching such technical analysis also helps you avoid getting swayed by any hype or hysteria in the headlines. This approach helps you stay grounded, keeping investor psychology in check, and stay focused on what market and leading growth stocks are actually doing.

Keep in mind that the stock market direction can change quickly — for better or worse. And there will be times when certain sectors, such as tech stocks, perform poorly while others such as oil stocks show strength.

Take a minute to watch the video and go through the routine and a buying checklist and selling checklist. You’ll see how the tools work together, and how they can help you become an even more successful investor. You can also use the IBD Stock Screener to zero in on stocks to buy and watch that fit your own criteria.

Study Stock Charts To Find Top Growth Stocks To Buy And Watch

Nvidia, Microsoft, Tesla, Apple stock and the FANG stocks — Meta Platforms (META) (formerly known as Facebook), Amazon, Netflix (NFLX) and GOOGL stock — are just a few examples of stocks that have shown exceptional performance across several market cycles. These stocks have also gone through turbulent periods of heavy selling.

To study these winners, take a look at the daily, weekly and monthly charts for Alphabet, Amazon, Tesla, Nvidia, Apple and other top growth stocks. (If you’re new to technical analysis, see our three-part series on how to read stock charts.)

And if you’re looking for the best long-term investments that have weathered several volatile periods, see which stocks make the cut for IBD Long-Term Leaders. You’ll find names like Microsoft, Alphabet, Pool (POOL) and Monolithic Power Systems (MPWR).

To get started, see our coverage of current stock market trends and case studies of leading growth stocks to buy and watch with Investor’s Corner.

How To Invest: 3-Step Investing Routine

1. Check Current Market Trends With The Big Picture And Market Pulse

Under the ‘Market Trend’ tab on, go to: The Big Picture

The first step is to know what kind of market we’re in right now. Is it time to buy stocks, or is it time to play defense and protect your profits?

Find out by checking the Market Pulse inside The Big Picture to see which of three possible stages the stock market is in right now.

• Best time to buy stocks
• Proceed with caution
• Be ready to take defensive action
• Avoid making new buys
• Protect profits and cut losses short
• Build watchlist for next uptrend

Also see: Stock Market Today (updated multiple times throughout each trading session)

2. Find The Best Stocks To Buy And Watch With IBD Stock Lists

Under the ‘Stock Lists’ tab on, go to: Stock Lists

The best performing stocks typically display seven common traits in the early stages of their big moves.

Using IBD SmartSelect Ratings and exclusive stock lists like the IBD 50 and Sector Leaders, you can quickly identify which stocks are most strongly showing those same characteristics right now. You can also use IBD Stock Screener to find stocks that fit your own custom criteria.

Which Top-Rated Stocks Are In Or Near A Buy Zone Right Now?
Simply scroll through IBD screens to find highlights of top-rated stocks in or near a potential buy range. It’s a simple, effective and fast way to build your watchlist.

3. Evaluate Your Stocks And Plan Your Trades With Stock Checkup And IBD Charts

Under the ‘Research’ tab on, go to: IBD Stock Checkup | IBD Charts

What’s the most effective way to maximize your profits and minimize risk? Always check both the company’s “fundamentals” (e.g., sales, earnings, products and industry trends) and “technicals” (e.g., price and volume action, support and resistance in the chart).

That combination gives you a major advantage over investors who only look at one or the other.

Does Your Stock Pass Or Fail?

Stock Checkup gives you pass, neutral or fail ratings for the most important stock-picking criteria. Just enter the ticker for an instant diagnosis of your stock. (See how to instantly diagnose your stocks.)

Time To Buy, Sell Or Hold?

Additionally, before you buy a stock use IBD Charts to make sure it’s in a proper buying zone. And use charts to see the right time to take your profits and minimize risk.

Also see: Free investing lessons on How To Buy Stocks | When To Sell Stocks | How To Read Stock Charts

How To Invest: Find The Best Stocks To Buy Before They Break Out

IBD stock lists help you speed up your research. You’ll also find alerts to stocks in or near a potential buy zone in the chart analysis provided for each name on IBD Sector Leaders, IBD 50, IBD Big Cap 20, IPO Leaders and Stock Spotlight.

Regularly monitor these stock lists and indexes using a buying checklist and selling checklist as part of your investing routine. Also, be sure to check the IBD Breakout Stocks Index, updated weekly.

Checking these screens regularly is a proven way to help improve your investing results by quickly building a high-quality, actionable watchlist. Using this simple three-step routine will also help protect your profits and keep any losses small in weak markets.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

Tips & Tools For Investing In Stocks

Forget Tech Titans Like Apple, Nvidia — Top Funds Bet On These Stocks

Find The Best Stocks To Buy And Watch With IBD Stock Screener

See Which Stocks Were Just Added To — And Removed From — IBD Stock Lists

Use Checklists To Improve Your Results: Buying Checklist | Selling Checklist

See IBD Stock Lists & Get Pass/Fail Ratings For All Your Stocks With IBD Digital

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