SHARETIPSINFO >> Articles Directory >>Riding The Bear Into A Bull Market
Ups and downs are regular phenomena at the stock market. Stock market goes through different phases at different times depending on various factors that control the stock index. Different phases like the bull phase, bear phase, and correction phase are part of the stock market. These phases become prevalent at the stock market in a cyclic manner and there is nothing unusual in that. But as an investor you have to always keep in mind that whether the market is bull phase or bear phase, it is not there to stay permanently.
When the stock market is going through the bull phase and most of the stocks are appreciating the buyers’ confidence remains at a high and there is a huge demand in the market. As the demand of the stocks remain higher than the supply during the bull phase the price of the stocks rise in a steady manner. But after a significant rise when a the retail buyers and the institutional investors starts withdrawing their profit from the market buying selling the stocks in their holding the market sees a fall in the demand of the stocks. This is the stage when the market sees correction and the price of the stocks get stabilized and the overpriced stocks get corrected at the most.
During the bearish phase the market sees just the opposite action. The price of the stocks falls drastically and a general feeling of panic prevails amongst the investors. As a result of the panic and in order to save their money, more and more investors sell the stocks that further reduce the index. But often it is seen that the investors wrongly assumes the bear phase to be correction and take their investment decisions accordingly that ruin their chance to save the investment. To reduce your loss during the bearish phase and to ensure that you successfully pass the bear phase to get good return at when the market once again gets steady and returns to the bull phase, you have to follow some strategies. Here we are providing some effective tips that will help you ride the bear into a bull market.
Think Long Term – There are investors who expect the bear to market to become steady all on a sudden. But you have to realize that it takes time to overcome the bearish phase to get stability in the market and then it can get to the bull phase once again. Therefore when you are investing in the bear market you have to think long term. There can be no other alternative to that. You have to pick stocks that are potentially good and will surely give good return once the market bounces back.
Be Cautious – While investing in the bear market you have to be all the more careful in your research. You should pick up stocks that are fundamentally strong and then only you should invest in them. There is a common tendency in the bear market to invest in stocks that had not fallen as compared to the index. But these investments do have its risk. May be the stock will start falling according to the market fall. Therefore, select stocks that are potentially strong and invest in them irrespective of the recent price movements.
Invest in Large Cap Stocks – One good way to select stocks in the bear market for investment is to choose the large cap stocks. These are the stocks that are otherwise highly priced and it is the bearish phase that will let you have these stocks at an unbelievable price. Moreover by investing in the large cap stocks will ensure good return as these stocks will surely rise when the market gets stable.
Do not Hurry – It is quite natural for the retail investors to get panicked when the index is falling like nothing. The downtrend in the market sends cold shivers through the spines of the investors. But do not loose your cool. Always remember that this is just another passing phase in the stocks market that will be over with time. It is a great time to make some wise investment that will give you great return in future. So stay positive and invest in good stocks. Do not hustle while taking investment decisions, take your time, study the stocks and make careful investment to win it big.
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