Bull and Bear markets - Volatility during uncertainties

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Bull vs Bear

Bull or Bears in the stock market, when it's Bull 📈 it's all green for investors, but when Bears fight back, the RED charts dominate 📉.

What are bull and bear markets? 🤔

When the stock market moves at an upward trend, this is referred to as the Bull market and when the market moves on a downward trend, it’s a Bear market.

What causes such drastic changes? Since the global restrictions affected many households and operations of companies, this has caused governments to print more money in an attempt to aid the financial constraints.

As part of reducing this available money in the economy, central banks have resorted to increasing interest rates that determine the lending costs to customers and companies; also considering the current supply constraint caused by the geopolitical factors in The West and Covid-19.

Read tips from top investors buying the dip here or below.

Tips from Top Investors 

 

A saying successful investors use a lot when investing is, “It's not about timing the market but spending time in the market”.

"Buying Fear and Selling Greed" - consistency is one of the fundamental principles that may continue to strive in helping many investors achieve their personal financial goals, during the unprecedented period, filled with uncertainties from the global dependence shift and other supply chain-related issues.

“You only at a loss when you sell”- would you be willing to sell what you bought at a lower price? When markets are in turmoil, negative in a portfolio is only a loss when you sell at the present value.

Taking into consideration that trading behaviour and sentiments may be more influenced by fundamentals that may pass on temporary fear if not halt in operations; the given environment may also present a premium opportunity for companies with high PE ratios with earnings growth.

In addition to the 'normal trade volumes' that have been taking place over the past few years, since the global restrictions came into effect, the appetite for investing has also introduced more trading, bringing in more trades into the markets.

As we can agree that, amongst other things, inflation-related elements are some of the factors that contribute to a volatile and bear market; some of the most powerful words may come from a leading investor, Warren Buffett, who said: "The best protection against inflation is your own personal earning power…No one can take your talent away from you.”

Read more on companies with pricing power and start-ups below

 

 

 

 

 
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