Make Money in a Down-Turned Market: Temporarily Withdraw

This article is part of a series of articles aimed to educate some of the ways to be profitable in a bear market. With the current economic recession, it may seem bleak, but there are still ways to profit!

You can shield your money from further loss by withdrawing it for a variety of other uses. Even retirement money can be saved from loss without tax penalties or fees. You may not know it, but you can shelter your mutual fund or stock money at any time, for any reason.

For non-retirement accounts, you can withdraw the money and not have to worry about penalties, etc. Pulling some of all of your money out while continuing to make contributions allows you to take advantage of investing while the shares are low-priced, while shielding your current money from loss by selling those shares.

If you can remove your money from the account completely, you be well off putting it in a high-yield savings or money market account. These types of accounts are fully insured by the FDIC and may earn interest as much as 5-6% a year. That's never as good as stocks in a bull market, but right now that's not the case with people losing 50%+ of their portfolio's worth! A high-yield insured account is a great way to keep your money safe while watching it grow.

Another even better option is a certificate of deposit (CD) account. These accounts offer even higher interest rates that traditional savings and money market accounts because you choose a term from 6 months or less up to 5 years or more. The longer the term you choose, the higher the interest rate! You can always end a term early, buy may have to pay a penalty of some of the interest you would have earned.

If you are concered about retirement accounts, you often can't completely withdraw the money or interest without paying taxes and penalties. However, you can still sell the stock you own, which removes your money into the brokerage core account. Some of these accounts earn interest and more importantly will no longer lose value when stocks go down! You can easily buy back in by using those core funds to repurchase stocks when the market turns for the better.

You may qualify for a hardship withdrawl on your retirement account, which would allow you to withdraw completely for a better investment option, like those explained in setps 3 and 4. Check with your financial institution or specific plan documentation to see if you qualify to do this.

By ehow.com