Bear and Bull Part 2

Hello Friends,

Just an extension of our previous blog ” Bear and Bull Part 1″.

Both bull and bear markets are inevitable

Both bull and bear markets are inevitable

In this Blog we would touch upon if bull and bear markets are inevitable and what are the basics investors should keep in mind while trading in bear and bull market 🙂

Both bull and bear markets are inevitable!

Smart investors try to anticipate both events to profit from their eventuality.

Bear markets are generally shorter in duration than bull markets.

To avoid being hurt by bear markets you must recognize the signs early and move part of your assets into cash equivalent investments.

It is recommendable that one should invest for the long term. Don’t let the bears get you down!

The same thing is true of bears – don’t panic and sell low.

Let the bear market run its course, which history tells us is likely to be short.

On the other hand, a bull market can leave many investors feeling pretty good about their ability to prosper.

Their confidence bolstered by the good times.

Some even find themselves swept up in “Bull Market Myopia” and forget the basic tenets of smart investing, like asset allocation and portfolio diversification.

Holding good stocks through bull and bear markets is a prudent strategy.

🙂

However, many investors feel that they do not want to be in the market during a bear market. It is difficult to predict when to move in and out of the market.

When a bear market ends, a strong upward move can occur in a short time.

If you are not in the market you will miss the move. The probability that your timing will be wrong is very high.

Unlike slow-starting bull markets, bear markets may start with a mini-crash – a major drop within a few days when investors least expect it.

Many investors are afraid to get out of a bull market for fear of missing “big profits” at the top of the market.

This is a recipe for disaster!

It is also known as greed!

As a bull market continues to increase, investors should start to decrease their stock holdings and move them into cash or money markets accounts.

Now, besides bulls and bears there are two other animals in our zoo to keep watch for!

Ostriches:

Are investors who stick to their old strategies, oblivious to changes in the world around them.

And then there are the Hogs.

Bulls can make money. Bears can make money.

But Hogs are investors who are too greedy and usually get slaughtered!

🙂

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