Bull and Bear

Bull and Bear

Bull Marketincrease in market share pricesthe economy is great, people are finding jobs,gross domestic product(GDP) is growing, stocks are rising. If a person is optimistic andbelieves that stocks will go up, he or she is called a "bull" and is said to have a "bullish outlook".

Bear Marketstock prices are falling the economy is bad, recession is looming andlow investor confidence

If a person is pessimistic, believing that stocks are going to drop, he or she is called a "bear" and said to have a "bearish outlook".

Where did they get their names.?

BULL BEAR

A bull will thrust its horns up into the air.Trend up.A bear will swipe down.Trend down.Characteristics of Bull And Bear Market Supply and Demand for SecuritiesBull Market:strong demand & weak supply for securities.share prices will rise due to competition.

Bear Market : more people are looking to sell than buy as demand is lower than supply .share prices drop.

Cont Investor Psychology:Bull Market:Investor interested in the market & participate in the hope of obtaining a profit.Bear Market : the decline in stock market prices shakes investor confidence.

Cont..Change in Economic Activity:

Spend more

Profitable business

Bull marketSpend less

Loss in business

Bear marketSecular Market Trendtrend is "bullish" or upward moving.trend is "bearish" or downward moving.Secular bull marketSecular bear market

Secondary market trendshort-term changes in price direction duration is a few weeks or a few months.correction is a short term price decline of 5% to 20% .bearmarket rally market price increase of 10% to 20%.

Primary market trendDuration is a year or more. Bull marketBear marketMarket topMarket bottom

Contreached the highest point

the end of a market downturnMarket topMarket bottom

Market capitulationthreshold reached after a severe fall in the market.investors capitulate (give up) and sell in panic further decline in the stock's pricegood time to buy stocks.

Bull and bear lineindexaverage line that indicatesbull marketorbear marketinstock market.Bearish :current index drops below the bull-bear linebullish : current index rises above the line

What Drives Bull Markets?

What Drives Bear Markets?

How to Predict Bull And Bear Markets?

Cont..Bull marketcountry wages a war increase demand for securities smaller supplies of securitiesincrease interest in the stock marketNewsBear marketSudden international crisesdecrease demand for securities Higher supplies of securitiesinvestors are not very confident and invest less.News

Investing During Bear and Bull Markets

buy stocks as the market gets bullish, and sell when prices reach their peak.

Buy stocks in bearish market at low prices, to set up long-term investments

How to protect ourself from bear market?Play Dead - Stay on the Sidelines

Putting a larger portion of your portfolio in the form ofmoney marketsecurities .

Certificate of deposits

buy when the right buying opportunity comes along.

stay calm and dont make any sudden moves.

Treasury bills

Cont..Value Stocksbuying opportunity for investorsvaluations of good companies get hammered down.

Short SellingA short position allows an investor to profit as the stock heads downward.

Cont..Bonds and Asset Allocationinvest in assets or asset classes which meets best the needs and objectives of the investor.portfolio spread - stocks, bonds, cash and alternative assets.

Defensive Industries performs better than the overall market during bad times. Eg. toothpaste, shampoo, shaving cream, etc. Provides defense to the portfolio.

Bull market - case studyIndia'sBombay Stock ExchangeIndex,SENSEX, was in a bull market trend for about five years from April 2003 to January 2008 as it increased from 2,900 points to 21,000 points.

Bear market case studyA bear market followed theWall Street Crash of 1929and erased 89% (from 386 to 40) of theDow Jones Industrial Average's market capitalization by July 1932, marking the start of theGreat Depression.