Is the market bull or bear, is the first thing to be learnt when you are entering the market. These two terms are important to understand to know where the market is going. Firstly, lets understand the meaning of the two terms: bull market means when there is a trend of rising prices having good market indicators such as economic boom, high employment, increasing GDP (Gross Domestic Product) etc. It’s a complete rosy scenario where things are going great. It can also lead to a situation where stocks can get overvalued. In such a situation, it becomes easy for an investor to choose stocks as markets are experiencing an upward trend. Another term is the bear market: that means the stock are prices are facing a downward trend, recession in economy, unhealthy economy etc. Bear markets are challenging because it calls for a tough test whether the picked stocks would rise or not. To reap benefits, it requires complete knowledge about the market, company’s performance, regulations, competitors and financial performances, quarterly and yearly financial results.
Many strategies are suggested by experts, financial analysts, brokers and portfolio managers to make you a winner in the bearish market. Investors indulge in short selling to beat the bearish market and some wait for the end of bearish market and invest when they forecast that the bearish market has come to an end. Many investors are pessimistic and feel that there would be drop in prices are known as bear. Another problem that investors face during investment is the assumption of bear market when the stock market prices tend to rise during the bear market. This is termed as stock market rally. It may occur when there is a large flow of money in the market. Hence investors must be smart to forecast the market trends.
What makes investors smart? Switch to https://investinghaven.com for latest news, terminologies, updates, news and chart analysis, trends etc and make your investment decisions effective. The investor needs support in the form of reliable investment methodology to forecast the stock bull market or stock bear market. The secular bull market that started in 2009, is it still on? To know much more about the long term cyclical trends and how to invest in it, you need quality forecasting analysis comprising methods such as moving averages.
Investors can take effective decisions with the help various indicators such as –
- Trends and charts- Charts help investors to see price trends that make you understand where the market is heading.
- Moving averages- Moving averages is a forecasting method that depicts past trends and calculates an average price. It is an effective tool of decision making for investment for investors.
- Fundamental analysis- Fundamental analysis is a method to study the macro environment indicators that affect the markets such as employment, inflation, government, performance of different sectors etc.
- Market sentiments- Market participants inhibit certain behavioral biases that lead illogical decision making. It is important to overcome these biases with reliable information base that supports effective decision making.