Have you ever wondered about how to invest during economic downturns, highly volatile cycles, and unique situations like the COVID crisis? Millions of people simply pull out of the market when they think things are going in a generally downward direction or just getting plain crazy. But it doesn’t have to be like that. In fact, many savvy investors stay in the market and a certain percentage of them look forward to economic uncertainty. Why? Because they know there’s a potential upside to every downside. How do they do it? Here are three of the most popular techniques for possibly turning bad times into good ones.

Buying Gold and Silver

As a general rule over long periods of time, the price of precious metals tends to rise in uncertain times and fall in stable economies. There’s an entire investing philosophy built around this concept and it has millions of adherents. How to they operate? Whenever the Dow or S&P index officially enters a bear market cycle, they purchase gold and silver instead of stocks. It’s a pretty simple technique that doesn’t call for a lot of calculating, which is one reason for its popularity.

Shorting the Market

Short selling stocks is an oft misunderstood activity. You’re shorting when you agree to deliver a fixed number of shares for a fixed price at some point in the future, but don’t yet own any of those shares at all. Here’s an illustration of the principle: If I sign a contract with my neighbor to deliver a 1964 Mustang to her next week if she gives me $20,000 today, even though I don’t have any cars in my inventory, I have short-sold an asset, in this case a classic automobile. Of course, the written contract would contain all sorts of specs like mileage, condition, etc. After she hands me the cash, I would go out and try to find a car to match the description, hoping to locate one for less than $20,000.

Brokers do this very same kind of thing with financial securities every day of the week. You can do it too if you think a particular company’s share price will drop in the future. Agree to sell X number of shares at Y price to someone, collect the selling price, wait for the price to drop, and then purchase X shares for the lower price and pocket the difference. To make it really easy, you can simply learn how to invest in a fund that shorts the entire market, like a reverse index fund.

Dollar Cost Averaging

The theory behind dollar-cost-averaging (DCA) is that all markets eventually return to their long-term equilibrium points. So, when the Dow starts to fall, continue to purchase securities at regular intervals in the same dollar amount you usually do. You’ll be getting bargains on stocks that have fallen hard and will stand to earn a tidy profit once things turn around. Sticking out the volatile period in this way spreads out your gains and losses and thus lowers any extreme impact of down and up cycles.