Share Market

A Bear Market is when the market is showing a downtrend. If the market is falling by more than 20% then we enter a bear market. The market shows a severe lack of confidence and the prices. Prices tend to stay around the same level for some time before gradually falling down in such a market. Bear market also has a regular fall in the indices due to which the volume becomes a stagnant number. People wait for this period to end soon and pick up speed. In terms of the bull market, a bear market is referred to as a tentative bull or a bull that is asleep.

A Bull Market on the other hand is the one that shows a lot of confidence in terms of number and flight. You can measure the confidence by way of high indices and rising prices. For example- Nasdaq goes up subsequently. The number of shares traded in the bull market is also at a high, obviously because the traders and investors are all happy to put in their money. The number of people entering the market is steeply high. The market is quite confident also because of the huge influx of people in the market. If there is a complete run of bullish days then the market is called a bull market. The rise is technically computed to be a rise of 20% at least. The huge rise of the Dow and Nasdaq during the tech boom is a good example of a bull market.

It is important to identify the market according to its nature. Mostly investors get too emotional and start selling their stocks in a bear market because they are too scared of losing money. These investors only indulge in buying during the bull market as they don’t want to miss out on the big gains that come by their chance. Yes, money can be earned that way; in fact big money can be earned by adopting this tactic. But, the biggest disadvantage of this kind of a market is that the investors tend to lose the money by trying to judge the market’s nature. There can be times when you actually can’t identify whether the market is in its bullish or bearish days. The safest way to prevent yourself from making these mistakes is to buy stocks and invest in the market by regularly making fixed size investments and holding on to them for a long period of time.