Answering the question "What is a bear market?" could clearly be very quick and easy or shockingly complex! We have tried to offer a conclusive bear market definition elsewhere. However, should you be hoping for a more indepth discussion of the complexities and impacts of bear markets, this is the page for you!
In his book, "After A Crash: Bear Market Money Making", 'Uncle' Harry Schultz describes some of the effects of the 21 bear markets seen between 1900 and 1987. He describes the index as losing between 13.9% and 90% in the different downward periods. Clearly, adding these losses together totals an enormous amount of money.
He also points out that these losses are for the index. Some stocks will have moved very differetly to the average producing many differing results for individuals. In addition, the index only tracks the biggest 'blue chip' companies. These firms are likely to have lost far less value than their smaller counterparts.
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Saturday, October 11, 2008
What Is A Bear Market?
Understanding Bull And Bear Market Situations
Understanding some of the basic facts about bull and bear market behaviour and charachteristics is sound advice that any newcomer should follow.
Clearly, the movements and underlying economics of each type of market is very different from each other and is discussed in this section of the site.
For many investors, especially relatively new ones, the current market situation - no matter what it may be - can appear to be the way that stock markets have always been. However, this isn't the case. Over the years - and the US market has been in existence in one form or another for over 100 of them - there have been some violent movements in price and prolonged periods of both prosperity and despair. It should be noted that in trying to analyse both bull and bear market features, no two have been the same. They almost certainly last for differing periods of time, are caused by different things, require different investment strategies and can create and destroy wealth in different ways.
In other words, understanding how either a bull or a bear market might work and move is very important.
Unfortunately, here at StockExchangeSecrets.com we do not have a crystal ball that will perfectly define or predict coming rises or falls in markets. Instead, we shall try and provide a brief but useful overview of these important terms and conditions.
