Becoming Who You Want To Be

The terminology Bull market and bear markets are generally used to describe the direction of the market either up or down. Stock prices up and down both during a trading day, and from one day to the next. But terms such as bull and bear describe the trend over the long term. Many analysts use a minimum analysis period of two years to determine if a change is a trend or just a change. They also feel the market needs to move at least 20%.

A bull market describes a market where prices are generally on the increase. A bull market often starts when market confidence is at its lowest. At this time investor confidence starts to increase and there is an expectation gains will be made on rising stock prices. This is happening now in the gold stocks market.

A bear market on the other hand is a trend in a downward direction. The entire market goes down, not just an individual stock.

The most famous bear market conditions were post 1929 after the Wall Street crash. In the five years after this stocks lost nearly 90% of their value. They obviously recovered but it was a long road.

There is a recognised pattern to bear markets that a large initial decline is followed by a short term temporary correction in prices. Many investors trade at this time an are burnt when the next wave happens and there is a sustained decrease in stock prices.

But bull and bear markets are a cycle and one follows another. The problem is that there is no guarantee when the change will come or how long the patterns will last. It is easy to identify in retrospect, but much harder predicting the future.

For many people the idea that markets have cycle is forgotten. One can make money in both a bear and a bull market.

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