(Excerpt from Wikipedia)
Editor's Note: (Knowing the market trend and determining whether it is a bull market or bear market is crucial in making investment decisions. In layman's term, bull market is when the stock market price is going up and bear is when the price is going down).
A bear market is described as being accompanied by widespread pessimism. Investors anticipating further losses are motivated to sell, with negative sentiment feeding on itself in a vicious circle. The most famous bear market in history was after the Wall Street Crash of 1929 and lasted from 1930 to 1932, marking the start of the Great Depression. A milder, low-level long-term bear market occurred from about 1967 to 1982, encompassing the stagflation economy, energy crises in the 1970s, and high unemployment in the early 1980s.
Prices fluctuate constantly on the open market; a bear market is not a simple decline, but a substantial drop in the prices of a range of issues over a defined period of time.
According to The Vanguard Group, "While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period." However, no consensual definition of a bear market exists to clearly differentiate a primary market trend from a secondary market trend.
Investors frequently confuse bear markets with corrections.
Corrections are much shorter lived, whereas bear markets occur over a longer period with typically a greater magnitude of loss from top to bottom.
Prices fluctuate constantly on the open market; a bear market is not a simple decline, but a substantial drop in the prices of a range of issues over a defined period of time.
According to The Vanguard Group, "While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period." However, no consensual definition of a bear market exists to clearly differentiate a primary market trend from a secondary market trend.
Investors frequently confuse bear markets with corrections.
Corrections are much shorter lived, whereas bear markets occur over a longer period with typically a greater magnitude of loss from top to bottom.
No comments:
Post a Comment