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Mutual Funds Investing:
Bear Stock Market
Funds
Like most mutual funds, the Bear Funds invests in a broadly diversified
portfolio of securities. But in addition to buying stocks, the funds also
engages in "short sales" and buys "put" options. An investor who sells a stock
short or buys a put option profits when the stock goes down. The fund also
holds short positions on indexes which act as proxies for the stock market
or a segment of the market. This portfolio of more "short" than "long" positions
(in addition to put options) allows the fund to benefit from a steep market
decline.
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