UPs and Down in Stock Market

Nothing goes up or down in a straight line, every bull market is full of pullbacks. However, in order to differentiate between a normal correction and a change in trend, the accepted norm is that a fall of 10% is considered to be a correction. Any correction is a buying opportunity, as it is a dip in the larger bull phase. But, when the fall extends to 20%, it is considered a change in trend.  This is when the markets are considered to have shifted from a bull phase to a bear phase. The stock market goes up the stairs, but comes down in an elevator, as the common adage goes.  This analogy is often used to define the behavior of both market types. The bear markets are vicious, quick and leave a bad taste in the mouth of investors.

As we know, a market is officially into bear territory, after a correction of 20% from its peak, whereas, the average bear market’s fall is 32% or last for 15 months. So, by the time a bear market is officially announced, more than half of the fall is already over. You need to be ready for it, when the indications on the horizon point to an imminent fall. 

Stock Market Movement:

The previous bull stops when market reach to the level of 1175 index and the bearish stops when it reach the level of 292. It means that the decline is around 75%. In the current bull the market reach up to the level of 1881 and now it hovers around 1470 till now. The decline is only around 22%. If the same percentage of decline goes like previous bear (i.e. 75%) it will reach up to the level of 470. But don’t be too pessimist and hope that the index won’t go up to that minimum level.

In my personal view, this is not the right time to sell our share, but we can stop loss. If your investment is through your saving then you can wait for the next bull and hold your share but if you invest through other medium like loan you can chose stop loss order. A stop-loss order is designed to limit an investor’s loss on a position in a security. An order placed with a broker to sell a security when it reaches a certain price. This is the time to learn new thing from the market for the new investor who didn’t see the bear trends and thinks that the market always moves up. If market can goes down it will surely go up and vice-versa. It’s just a matter of time. We must be able to see both part bull and bear. The right time to buy the share is in the bear market and sell in the bull. But we are just opposite when the market goes up then we started buying and when the market goes down then we started selling. People thought that earning money is simple in share market but it is very difficult to earn from stock market. People can earn money from the market only if they have the patience. No body know from which level the market will bounce back. But don’t be so negative and try to find out the good stock and add up in your portfolio. Last but not the least, do not see the index, see the performance and price of individual stock.

It’s just what I see and think about market from my experience and it needn’t to be agree with my views. Different people see the market from different angles. Anyone are free to put yours views.