| Bear Facts Quick Links |
What's a bear anyway?
Bears follow the rules.
Tracking the great beast.
How to trap a bear.
|
| What's A Bear Anyway |
|
Bear markets always come after a good bull run, where stocks and the exchanges are making new highs. Often, over-exuberant investors and uneducated traders have driven prices and valuations out of whack, and sooner or later the piper needs to be paid.
Think of it like a great spring. The further you stretch it, the greater the recoil when it gets released, the more you pressure it down, the greater the explosion. The bear market begins with the spring being stretched, and ends when it can not be compressed any further.
|
| Bears Follow The Rules |
|
Generally, bear markets last for between 6 months to 18 months. As well, they usually shave about 15% to 45% off of the markets from their highs, and often set stocks back to prices they had hit over 16 months ago.
|
| Tracking The Great Beast |
|
One factor that precedes a bear market is a record number of investment clubs and newsletters. Since the market has had such a great run up till now, everyone becomes an expert, and more people are interested in getting a piece of the gains through a club or newsletter. When these services and groups reach record numbers, it often foretells of a market crash or coming bear run.
On a similar note, highly positive investor sentiment is actually a warning sign. When everyone thinks the market is going to keep going up most available cash is invested in the market, and there is little money left on the sidelines to maintain the influx and keep shares prices balanced at such high valuations.
Therefore, as has been proven time and again over the great bear markets of the last hundred years, when no one thinks the market is going to go down, and even your grandmother and non-investors are giving you the latest hot stock tips, beware.
Most importantly your guard will probably be down when a bear is about to attack, because you feel confident since you recently made some great gains off of your stocks. You will be playing with house money, which is explained in our article, Cashing Out.
|
| How To Trap A Bear |
|
To capitalize you need to see it coming, and move your money out of high-risk investments. Turn it into cash or sink it into defensive stocks. Look for bargains when the market starts to sink, and get involved in these undervalued shares, even if they are investments that you recently pulled out of at higher levels for a big profit.
Playing a bear market correctly can make you as much money as being a part of a great bull run.
|
|
|
Related Features |
|
Money Matters Page - Money Matters are a unique series, with emphasis on statistics and historical patterns. Focus is applied to the analysis of data as a major part of the features, and the implications of the results for penny stock investors are revealed.
Hibernating Bear - When investment times are good, and the bears are showing no signs of themselves, you can really multiply your gains by following a few simple principles.
Reaction Action - The rise of electronic trading has meant that an ever widening group of people are investing in the stock market. In a lot of ways this helped fuel the largest bull market in history but has also had a hand in the large sell-off that followed.
Rich Cowards - A little caution can go a long way. Here is how to turn cowardice into cash, investor jitters into market gains.
Why They Whisper - Analysts and brokers factor in several criteria to develop their 'wisper numbers.'
Word On The Street - Given the number of variables that make a stock a wise or poor choice for investment, the brokerage community has developed a system designed whereby a single number is used to show a stocks strength.
|
|
Stock Quotes |
|
Quotes, charts, and research (15m delay) are available for most NASDAQ, OTC-BB, and North American stocks through Bigcharts.com.
|
|
Navigate |
Home
Back To Top
|
|