Bear Fund

Bear funds are mutual funds that operate with the goal of high returns amid a market on the downturn. These can be useful for short-term investments. They can be risky, because the timing is critical to the yield.

Strategies can include purchasing put options on an index, while selling the short shares in that same index. Or the fund can focus on securities that can gain when the market dips, like gold. Ever notice how gold commercials pick up on TV when the market starts slipping? That's because people like to invest in things they can touch in times of unease, and these funds take advantage of that desire.