As it looks more and more like the bear market is back (or maybe it never left), we again find ourselves in a world that’s challenging at the least and even dangerous. Investors are grappling with too much debt everywhere, chaos in Europe, gridlock at home and a slowing global economy.

Ongoing stock market volatility and global uncertainty present the average retail investor with the possibility that we might once again, perhaps even more than once, find ourselves standing in front of a freight train like the one that crashed into us in 2008.

Still, there’s always opportunity in fluid situations like these, and in today’s tumultuous environment I believe it’s time to once again consider ways to protect your wealth and profit from any future potential declines in global and domestic equity indexes.

Some keys that experts use to survive a bear market bite include:

• Moving a portion of their portfolios to cash. Professional investors and money managers routinely switch assets to cash when the market heads south. The old adage, “Cash Is King,” is particularly valid during bear market meltdowns.
• Using stop-loss points to exit profitable positions and take profits home or minimize losses. Taking “cash off the table” can be a great idea as systemic and market risk increase.
• Buying protective put options to hedge long positions and limit losses without selling positions. This is cheap insurance to protect gains and hang onto stocks you don’t want to sell but that could otherwise take a hit during market declines.

The point is that investors who win during hard times in the stock market understand that if they’re not losing money, they’re effectively making money because when things turn back up, they’ll be moving ahead with wealth accumulation instead of spending what could be years just getting back to breakeven.

Investors Can Actually Make Money During Bear Markets

If we’re headed for another rough patch in the stock market, most investors will continue doing what they always do, sitting around wringing their hands and searching the financial press and TV, looking for a nugget of hope from people who know less than they do.

But another group of individual investors — financial advisers and newsletter writers — have been able to capitalize on this recent decline. It’s not rocket science, and here are just three methods they’re using.

• Buying stocks, ETFs or mutual funds that do well in bear markets. This is an obvious possibility, and in fact, many investors have already figured this out. Possibilities include the traditional defensive sectors like consumer staples and utilities.
• Buying bonds, mutual funds or exchange-traded funds (ETFs) that track widely followed bond indexes because bear markets are typically accompanied by a flight to quality that causes the face value of bonds to rise.
• Buying inverse ETFs that move opposite to their underlying index, making money as the market goes down.

No one can say for sure if we’re headed for another bear market. However, factors like Europe, the apparent failure of the congressional supercommittee to reach a deal and slowing global economy paint a grim picture indeed. If the bear is back, some or all of these strategies can help you  find shelter — and seek profits.

Disclosure: Wall Street Sector Selector actively trades a wide range of exchange traded funds and positions can change at any time.