What is the significance of a bearish strategy in investing?

A bearish strategy in investing is significant because it is predicated on the expectation that the value of a particular asset, market, or investment will decline. Investors who implement a bearish strategy might take short positions, sell securities they believe will drop in value, or utilize options that profit from falling prices. This proactive approach allows investors to potentially capitalize on negative market trends and hedge against losses in their portfolios.

In contrast, the other options imply bullish or neutral strategies, which do not align with the essence of a bearish outlook. Understanding bearish strategies is crucial for investors looking to manage risk and create opportunities in volatile or declining markets.