If you are thinking about getting involved in investing, then the first thing you should know is that it is not always a good time to invest. As a matter of fact, you really have to know what is going on in the security market of your choice before you decide to start buying or selling stocks, bonds and other financial instruments. Some of the most notorious investment climates occur during bear markets. When the market has reached this point, you don’t have to be an investment expert to know what is happening. As a matter of fact, this kind of investment is defined by its overarching mood of pessimism. This is the investment equivalent of not wanting what anybody is selling, and the major investment indexes, such as the Dow, always take hits.

When there are bear markets, it because the prices of investments drop significantly. This means that investors believe that the values of securities are falling and they want to get rid of those securities immediately so as not to lose too much money. In most cases, people sell their securities to retain at least some of the value of their securities, though in other cases, investors might take other strategies. While pessimism is bad for a market, especially when it is self sustaining, it sometimes can be short lived.

If you are buying or selling securities when bear markets are occurring, you might want to read what some of the experts have to say. For example, there might be some markets in which it sure is bad, but if you just hold out for a little bit, you might actually regain some of the value you already lost. This depends on the kind of securities you trade, as well. For example, if you are in the commodities market, it usually is a good idea to wait out any immediate pessimism. At the same time, stocks or bonds from troubled nations might be the kinds of securities you want to get rid of immediately during turbulent times. If you are new to the world of securities, you certainly should get different opinions.

A word to the wise concerned bear markets, however, is to make sure that you know the difference between a correction and a bear market. When there is a correction, there are mass amounts of selling of good securities for low prices. This is great for people who are just entering the securities game. When the market has bear characteristics, however, it is never a good sign.

On March 14, 2012 By Richard Wilson

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Bear Markets – Understanding the Term

Beginning investors will undoubtedly come across plenty of terms with which they are not familiar. A “bear market” is probably one of them. Bear markets exist when the market condition sees falling securities prices, investment pessimism, and subsequent losses. While there isn’t a precise number to measure or define such a market, taking a 20% downturn in market indexes like the Dow Jones Industrial Average is said to be the beginning of a bear market. Unlike a correction, this is not a short-term trend that will readjust itself in a couple of months, and entry points are at levels from which most investors would shy away.

On the opposite end of the spectrum is the bull market, which is a term to indicate when stock prices have gone up for a long period of time. This is also indicative of a certain company, sector, or industry going up. Bear markets are the opposite. A prolonged instance occurred in the 1970s when the stock market went down for more than a decade. Since this scares investors away from investing, it only perpetuates the downturned market, making it difficult to turn around.

This type of market will affect any investments you currently have, since they will begin to drop in price. This isn’t necessarily a bad thing if you don’t intend on selling your stock right away. In most cases, when left alone for prolonged periods of time, investments will right themselves when the market takes its spiral turn upward again. Other types of investors, like real estate investors, can even take advantage of a downturned market. This is also the time to buy into stocks that were once too high to afford, but look at companies that are going to do well a couple of decades down the road.

A good way to gauge this is to determine if the products or services offered will still be in use by the majority of people in twenty to thirty years. Load up on falling stocks while you have the opportunity to take advantage of the bear market, because history has proven that the prices will return to the levels at which they were before the downturn. Because of this, you could end up making quite a hefty profit from this kind of market if you play your cards right. Try not to fight this kind of market and sit tight until your investments work themselves out again.

On March 13, 2012 By Richard Wilson

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Bear Markets – How to Survive a Bear Market

The first terms you might hear when you are learning about the stock market include references to bear and bull markets. Bear markets are those in which the prices of securities are falling, causing pessimistic or negative feelings in traders. The more that prices fall and stocks are sold, the more pessimism can grow, causing a bear market to last for a lengthy period of time. Although there is no exact definition, in most case a market is considered to be bearish if there is a downturn of at least 20% for a period longer than two months.

Although bear markets might seem like times to give up on the stock market for awhile, it’s better to look at this as a time of opportunity. Savvy investors can still make money even in a bleak stock market, as long as they are realistic. The first thing to realize is that you are not going to make the same amount of money in a bear market that you would in a bull market. After you have made money on your investments, it’s easy to forget that the market always goes in cycles and a time of loss will follow a time of gain. This is a normal part of the business cycle. As a result, long term investors may just want to carry on as usual in this time of economic downturn, knowing that prices will eventually rise again at some point.

There are several other options when you find yourself investing in bear markets. You can decide to stay calm and take some of your money out of your portfolio for safekeeping, because it isn’t working to make you more money like it would normally. Another option is to snap up the bargain stocks as their prices fall. Many investors view this as a time of opportunity, because even the top global corporations may see their prices fall.

Spreading your cash among bonds and alternative assets is also a good idea during bear markets or any other time, because the more diverse your portfolio, the better you will be able to weather any financial risk or unforeseen expenses. There are many different strategies to follow, but the main thing to keep in mind is that it’s important to proceed with caution. If you are relatively new to investing, it’s best to leave your asset management in the hands of professionals so that you can figure out how to ride out the bear market with a net profit at the end of it.

On March 12, 2012 By Richard Wilson

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Bear Markets – Surviving in Bear Markets

Some investors look at bear markets as frightening times, while other investors look at bear markets as opportunities. The problem with bear markets is that they are persistent trends that can be very difficult to stop. Investors need to remember that this not a temporary correction or a cyclical drop in investment value. When the markets turn bear, it is for an extended period of time and can cause a significant amount of financial loss. But when you understand how to navigate a bear situation, it can be easier to retain your earnings and avoid following the trend towards the bottom. Losing money is every investor’s fear, but realizing that fear on a consistent basis can be terrifying.

It can be almost impossible to predict the bottom of bear markets. Investors that try to buy based on what they perceive to be the absolute bottom of a security will usually lose out. One of the primary identifying behaviors of bear markets is that losses can occur in areas where there is usually stability. Many investors run to the blue chip stocks when the bottom starts to drop out, but blue chips can be so saturated that the slightest change in value can spark significant, but short-term, gains and losses. The idea behind surviving the bottom of a market can sometimes be to get out of the market all together.

Many investment experts will tell you that liquidating assets during bear markets is a panic move that hardly ever works. But if you truly need to protect your position when you find yourself involved in bear markets, then liquidating may be the only solvent solution. The problem is that if everyone starts liquidating, then the problem only gets worse. That is why experts always try and talk investors out of liquidating when the bottom starts to fall out. To find the bottom, there needs to be a firm foundation. Liquidating assets does not help create a strong market foundation.

In bear markets, you need to be patient and start your own recovery by getting involved in a series of short-term gains. Moving your money continuously from one investment to the next can seem imprudent and even expensive. But if you can find ways to make short gains, then you can offset any immediate losses and at least try to survive bear markets until the recovery begins. Remember that a real recovery can take years, so plan your approach and be patient.

On March 12, 2012 By Richard Wilson

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Bear Markets – Understanding Investment Markets

When it comes to the world of investing, understanding the markets is a big part of your decisions. You have to make sure that you look at everything and know what trends are going on. You also have to make sure that you know how to capitalize on each market and make it work for you. Bear markets are when a decreasing trend is going on over time and is believed to continue to decrease in the future. When the markets are decreasing, it might seem like a bad idea to invest. The reality is, however, that you can use bear markets to your advantage.

Identifying this market isn’t easy because it’s less analytical and more about a feeling. Some people feel that a significant decline over 6 months or more might be a bear market, while others feel that a stock that loses more than 20% from its peak point is considered to be in a bear market. Of course, if you have identified this type of market based on any indication, you need to know how to profit from it and not just avoid it completely. There are some good investments that can be made in this type of market, but only when you know what you are dealing with

If you can short sell or stay put, bear markets will work for you. However, this is a very risky market to work in so not everyone is going to take the chance. There is a lot that you have to learn about these markets and how to make the trends work for you, but you also have to remember that there is something to be said for doing nothing if you’re not sure or willing to take the risk. The first thing that you don’t want to do is panic, because if you panic you will sell and you might lose out on a potential investment opportunity in the future once the market recovers.

Before you can get the most from investing, you have to know all about bear markets, bull markets, and other investing trends. You should understand how they work and what they can do for you, as well as what you can get for your money. If you take the time to check out everything that you have to choose from, you should have no trouble finding what you need. Get the details before you invest so that you understand the market that you are working in.

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Bear Markets – Pessimism in the Market

Bear Markets – Understanding the Term

Bear Markets – How to Survive a Bear Market

Bear Markets – Surviving in Bear Markets

Bear Markets – Understanding Investment Markets

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