Three stages of bull and bear markets!

The bull and bear markets of the stock market are traditional indicators of the business cycle. As an investor, distinguishing bull and bear markets in the stock market and grasping the long-term development direction of the market can avoid the impact of short-term market fluctuations and the impact of complex market information.

For example, the market fluctuations brought by news information, the sudden and sharp drop in market prices, and the impact of investor sentiment have led to making wrong investment trading decisions.

The stock market is in a bull market, most asset prices will continue to rise, and the stock market is in a bear market, most asset prices will continue to fall. Both bull and bear markets are divided into three stages, so how to tell whether the stock market is in a bull or bear market, and at what stage.

S&P500 Index

What is a bull market?

In the first stage of the bull market, after the market economy was in recession, the stock price fell to a very low position and the transaction volume was very small, but the market economy began to improve.

Value investors believed that the value of the stock was undervalued, and market capital began to enter the stock market. Buying undervalued assets, stock prices started to rise, but at this time most investors still do not believe that the market economy has recovered and market sentiment is still pessimistic.

In the second stage of the bull market, after the stock price rose for some time, the market continued to announce favorable news. Investors began to restore confidence in the market economy. With the increase of market economic value and optimistic market sentiment, investors continued to enter the stock market to buy Into assets, stock prices continue to rise, and trading volume continues to rise.

In the third stage of the bull market, the market economy grew excessively, investors were confident about the market economy prospects, market sentiment was extremely optimistic, funds went into the stock market crazy to buy assets, stock prices continued to hit new highs, and trading volume was active.

S&P500 Index

What is a bear market?

The first stage of the bear market appeared at the end of the third stage of the bull market, the market economy began to decline, and the stock price had risen to a very high position. The over-inflation of asset prices caused the value of stocks to be greatly overvalued. Value investors began to sell stocks, and stock prices began to fall.

In the second phase of the bear market, more and more investors are beginning to realize that the economy has already declined, the market keeps publishing unfavorable news, market sentiment is panic, investors are constantly rushing to throw stocks, and stock prices are falling rapidly. In the third stage of the bear market, stock prices fell sharply, and market investment sentiment was extremely pessimistic.

Investors all threw out stocks, and stock prices fell to a very low position. With the recovery of the market economy, value investors have started to buy undervalued assets, funds have begun to enter the stock market, and a new round of bull market will begin.

There is no identical bull market, nor is there an identical bear market. If investors know which economic cycle they are currently in and how to distinguish between the characteristics of bull and bear markets, they can make correct investment trading decisions when stock prices are rising or falling too much. The growth and decline of the market economy will create opportunities for us to buy or sell assets.

Comments

Will the Great Depression make a comeback?

the Great Depression On March 21, 2020, the United States already had initial unemployment data. Exceeding market expectations, the number of applicants reached 3.28 million, a record high. The current unemployment situation in the United States. Before March 7, employment in the United States was not affected by the epidemic. In the week of March 7, the number of people applying for unemployment benefits for the first time in the United States was 211,000, a decrease of 4,000 compared to the previous week. It is still healthy. This shows that the United States is in a good employment track range. The actual data began to fluctuate, that is, the data for the week of March 14, the number of people applying for relief reached 282,000, a slight increase. On March 21, the number of people applying for unemployment benefits soared to a record high this week. 1.7 million people have far exceeded expectations, and market expectations are about 1.5 to 1.7 million people. It can be said...

Bear market coming, gold(GLD) assets become essential

The economic data of the global economic powers have been deteriorating, entering the bear market stage of the economy, and people have become more cautious when choosing asset investment. We should choose investment products with a low correlation coefficient with economic performance and investment products suitable for the current economic cycle. Investors should pay more attention to foreign exchange and commodity markets so that they can add value to your assets. Among many assets, anti-inflation commodities such as gold have become essential assets. Take gold as an example. For many years, gold has been regarded as an anti-inflation commodity by international capital markets and has been regarded as an important asset hedging tool by investors. There is also a saying, "The world bought gold during turbulent times." From basic political theory, we know that gold is not currency, and the currency is naturally gold and silver. Although gold has withdrawn from ...

Why has international oil(USO) prices plummeted?

As OPEC and Russia failed in negotiations and could not reach an agreement to reduce production, Saudi Arabia issued a comprehensive production increase announcement. Russia followed Saudi Arabia to increase production. Due to the sharp increase in oil supply, international oil prices plummeted, and US stocks were affected by the spread of the epidemic, and international oil prices The plunge, the U.S. stock market plummeted, triggering multiple fuses. S&P500 Index Oil is a commodity whose price is affected by supply and demand. When oil production increases, supply increases, prices fall, and at the same time affected by the epidemic, demand decreases, and prices also fall. Oil supply increases and demand decreases, which is the main cause of the plunge in international oil prices. In terms of oil supply, since the United States developed shale oil, US oil production has become the world's largest. The production cost of shale oil is more than US $ 40, which is the ...

4 George Soros advice to investors!

Who is George Soros? George Soros is a Hungarian-born Jewish businessman. It is one of the most influential investors in the world. In 1969, the Double Eagle Fund was established for Arnhold & S. Bleichroeder, an investment management company. In 1973, Soros and his assistant Rogers left Bleichroeder to co-found Soros Fund Management. In 1979, the well-known Quantum Fund was established and continued to make profits. In the Asian financial turmoil in 1997, George Soros sniped the Thai baht and the Hong Kong dollar, which was frightening. Learning from the experiences of successful people can benefit a lot. Here are 4 tips George Soros gave investors. First, to be successful, you must have ample free time. Most people want to be rich, but not everyone realizes the importance of free time. Many people spend a lot of time working to accumulate wealth, sleep, and forget. Set the goal to complete the work indicated by the superior, or the needs of business partners. But they hav...

Barrick Gold stock price soars after Warren Buffett's buys a stake?

Has Buffett bought gold ? Buffett has not changed. Buffett does not want to hold physical gold, but he has never said that he will not buy shares in gold mining companies. Looking at the entire market, there are not many stocks that fit Buffett's trading. And Barrick Gold Company is just one of them. Buffett bought nearly 21 million shares, and the current share value is $563 million. We now look at the underlying logic of Buffett's purchase of Barrick Gold stock. Compared with physical gold ETFs, gold mining companies can respond positively to market conditions. There are financial reports to analyze, With dividends and stock repurchase plans, gold mining companies have the right to reward shareholders through capital return plans. In contrast, the physical gold ETF has no gains. The market generally believes that it is still in the upward cycle of gold prices . The current international environment is one where black swans emerge one after another. While paying att...

How to judge the market entry signal?

buy sell Most people lose money when investing in stocks. One of the biggest reasons is that they buy stocks at the wrong time. Why did they buy the stock at the wrong time? Facts have proved that many people do not know that stocks only rise 1/4 times, and that is the easiest time to make money. And in another 3/4 of the time, making money is difficult, and losing money is easier. Today, I will share how to choose the right time to buy stocks. I hope you can see the final result because, in the end, I will share with you how to use simple technical indicators to help us find the exact input time. First of all, everyone must know a concept, whether it is a stock market or a stock, there are four stages. Let us take the stock market as an example. The first stage is called the "next stage". At this time, the market has just experienced a sharp decline, and most investors in the market are not interested in the stock market, because their memories are still stuck in t...

Many companies will China close in 2020?

Starting in March, all walks of life in China began to resume work. People stayed at home for more than two months. Many people's moods changed from tension to leisure, and now they are anxious. It's not just the bosses who are anxious. Many employees find that their rents and mortgages are still being paid, the holidays are extended, they can't go to work, and their salaries aren't. Whenever there is no money it is a big problem. More than 700 companies closed down in February, but getting fewer wages is also better than the company suddenly closing down. In February, more than 700 companies have closed down, and this number should be exceeded. Statistics show that more than 55% of catering businesses in China have resumed work, but compared to the same period last year, affected by the epidemic, 78% of catering companies have lost more than 100% of their operating income, and another 16% of them have lost over 70%. This year's sudden outbreak, the impact...

7 great investors' operating strategies to deal with the stock!

No one can be 100% sure about the outlook for the US stock market. Instead of entangled in whether the bull market in US stocks will end, it is better to think about what lessons can be learned from this plunge. Historically, due to the end of the summer market in September, U.S. stocks did not perform well. The plunge on Thursday sounded like a wake-up call for investors earlier. Be careful next week. Although Nasdaq is tolerant of faults The rate is high, but the up-and-down shock pattern has not changed, and there needs to be an established process. Investing in stocks should take a long-term view, have a long-term investment mentality, don't care too much about the rise and fall of one or two days, and don't feel unhappy because of the turmoil of the stock market, which affects the judgment of stock buying and selling. Today, let's take a look at how those familiar investment masters are invincible. The reason why masters become masters is that they have become masters ...

10 stocks tell you why U.S. stocks plunged!

On February 24, 2020, the U.S. stock market plummeted by 1,000 points. Since the outbreak of the new coronavirus epidemic, although market funds have already begun to flow into safe-haven assets such as gold and bond markets, the epidemic does not seem to have an impact on the stock market trend. As the new coronavirus epidemic spread further, and companies began to publish performance reports, investors began to worry that the epidemic would affect the company's next quarter's profit growth and made predictions for the company's next quarter's performance. Analysts lowered the companies The profit forecast for the next quarter, and the Fed is expected to cut interest rates in March, the Fed's rate cut indicates that the economy may further decline. S & P 500 Index Fed watch As an investor, you need to know how to value a company using PEG indicators. Generally speaking, the valuation using the PEG indicator is more accurate, but it is only used t...

FinanceLinkway

Search This Blog