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Stock Market Investing – Navigating the Bull and Bear Markets

Stock market trends are generally described using one of two colloquial terms: the Bull Market and the Bear Market. The market shifts back and forth between these two market conditions.

A bear market is a phrase that represents the general downturn of the market, or lowering stock prices. On the other hand, the bull market is just the opposite – the positive growth of the market’s stock prices.

Individual stocks with increasing value are known as bullish stocks, while those experiencing a decrease are called bearish stocks.

Indicators of Bear and Bull Stocks

You cannot accurately classify the stock market trend simply on the basis of short-term data. Determinations of bull or bear markets rely on the overall trend of stock prices over months of time.

For example, there will inevitably be temporary ups in a bear market and temporary downs in a bull market. So the stock market fluctuates daily, but it is more important to assess its longer-term overall trend.

Economic Indicators of the Market

The stock market tends to mirror the overall state of the economy, having a number of similarities with the overall economy.

A bull or bullish economy tends to have moderate interest rates and a low unemployment rate. Confidence in the stock market is high, and the performance of stocks on average either lean toward or are strongly positive.

In times where the economy is undergoing an economic depression, we see high rates of unemployment and a number of poor economic indicators. In such an economy, investors tend to lose confidence in the market, and may sell their stocks in large amounts.

Extreme bear or bull markets are not good for the stock market, with either extreme generating its own set of concerns. A high bear market can exacerbate economic problems as investors rush to dump their stocks quickly to minimize their losses.

Strong bull markets lead to a “bubble” of stock wealth built due to over-confidence of investors. Eventually this bubble bursts, causing major problems to the performance of stocks. When such bubbles burst, companies die.

The Bull Market

Bull markets draw investors who to want to purchase stocks. The performance of the economy and the stock market tends to be shifting positively, making it a good time to invest for most investors – if they invest early enough.

Investors tend to have more money during the economic conditions of a bull market. However, the increased demand and shortage of supply for stocks can cause the stock prices to become inflated, or over-valued.

It can be easier to earn a profit in a bull market because the trend of the economy is shifting upward and everyone knows. But eventually the economy and the stock market experience another downturn in its cycle of ups and downs.

For investors, the profitability key comes in accurately determining the transition point where the market begins to fall and then take at least some of your profits by selling a portion of your stocks before being negatively impacted by the downturn.

The Bear Market

The bear market can be extremely difficult to navigate, especially for a novice investor. Investors here use a number of special investment strategies to try to make the best of a bad situation.

One of these techniques is called “short selling,” which is the selling of stocks as you anticipate its price will continue to decline. Then the investor can buy the stocks back for an even lower price.

Other investors decide to focus only on investing in more stable stocks such as government owned utility companies because they are less risky.

Opportunities In The Indian Stock Market And Complexities Involved

Lucrative opportunities are myriad in today’s times. It all depends on which field you choose and how you grab them. The Indian stock market has been considered one of the most lucrative platforms for making money. Thousands of Indian stocks listed in the NSE of India and BSE of India, the two principal courses, are traded everyday. Investors categorize the Indian stocks into short term and long term. While both the categories involve risks, it requires more of your dedicated time and efforts in the short term investment options. Keeping a tab and consistently evaluating the investments, staying in touch with every change that happens related to your stocks does make sense. You will then know whether you are moving towards the profitable direction or whether your investments won’t yield returns.

Opportunities though available in the Indian stock market cannot be perceived by all. It is the knowledgeable, wise, and those who have gained expertise who do perceive them and utilize them to their advantage. Keeping track of the value of the Indian stocks to determine whether they are secure or not should also be taken into consideration. It is staying updated with the up-to-the-minute market trends that will help you keep track of the performance and rise or fall in value. Do also collect information about potential companies listed in the NSE of India and BSE of India. Once you have started investing in the Indian stock market, it is advisable that you keep records of your buying and selling, gains and losses over time and review them periodically. Such a measure will let you assess your risk helping you reallocate your investments in sync with your current risk capacity.

Wise investors including beginners never follow advice or stock market tips published on web. No doubt few of the stock market tips may prove to be useful but you should be able to distinguish between the numerous tips displayed. One aspect to be noted here while investing in Indian stocks is that you should never let your emotions overcome your judgment. It is but natural to get excited when gaining and bearing a negative bent of mind when losing; well, these are part of the game.

When you are investing in the Indian stock market, you should be ready for both losses and gains. It is controlling of your emotions that you can take right trading decisions. And there are countless other factors involved following which only you can experience a win-win situation. Few of these factors worth mentioning are keeping track of the performance of stocks listed in NSE of India and BSE of India so that you select only the potential ones, staying updated with market news, utilizing investing tools like stock technical analysis and fundamental analysis, following carefully created strategies, maintaining risks, and the list goes on. If you happen to be a registered member of a stock broking portal, you can follow tailor made stock market tips.

Stock Market Tips – Prevent Your Stock Picks From Going Bust

It’s easy to make money on the stock market, right? All you have to do is buy good stocks and sell at the correct time. The experts will tell you that the stock market is a sure thing – a guaranteed money maker. Well if it’s so easy, then why do so many in the stock market game lose money? History has proven over time that there are a few common mistakes by traders that cause them to pick losing stocks and here they are:

1. Refusing To Take A Small Loss

You’ve heard the saying “You Can’t Win Them All”. This holds very true with picking stocks. Even the most proficient of traders take their share of hits. What makes them come out on top in the long run is they know when to fold. It’s okay to be wrong, just don’t stay wrong for too long on any particular pick. If your pick doesn’t work out the way you thought it would – get rid of it and move on! Traders need to have the mindset of a relief picture in baseball. If you get shelled today, you get back out there tomorrow and start over.

2. Panic Selling

As stated above, sometimes you just have to bite the bullet and sell a stock that’s a loser but make sure you don’t jump the gun. You should never sell just because you’re scared. You should sell if it makes rational, logical sense to do so. Too many people sell stocks because the market had a bad day and they’re just plain afraid it will go even lower the next day. They panic and sell and then kick themselves when the stock shoots back up.

3. Not Doing Your Homework

To be a successful trader, you simply must do your research. You need some type of logical system in place for picking your stocks. This isn’t the race track and you cannot allow yourself to pick a stock on a whim or because Joe down at the coffee shop told you that a certain stock is a sure winner.

4. Picking Stocks With Emotion

This is the biggest mistake of all. Fear and greed are part of human nature and this is the hardest obstacle to overcome when picking stocks. If you can eliminate emotions from your trading, you have just won half the battle.

These are just some of the things to keep in mind when picking stocks. There are many others, but just using common logical sense and having a set system in place will have you picking more winners and consistently pulling in the profits.