Seven Investing Techniques to Get Ready for Bear Markets
Recognize that you have the means to survive a crisis. Match your finances to your objectives. Recall that downturns are temporary. Be sure to diversify your holdings. Avoid missing out on market recoveries. Include money in your toolkit. A dependable financial expert should be found.
The good news is that bull markets typically outlast bear markets, lasting an average of 3.8 years in bull markets, according to Investech Research.
The Dow Jones Industrial Average has down more than 20% so far in 2022, the tech-heavy Nasdaq 100 has fallen close to 33%, and Bitcoin, the most well-known cryptocurrency in the world, has lost close to 60% of its value.
Bear Markets in the United States Since 1928 Since 1928, there have been 28 bear markets. The average period was 289 days, and the average drop was 35.62%.
The longest bear market ever happened in 1973–1974 and lasted 630 days, or almost 21 months, according to Seeking Alpha, which examined every bear market since 1928. During that time, the stock market experienced a 48% decline. From 1980 to 1982, the second-longest bear market lasted 622 days.
The essence of the issue is that the 2022 US stock market meltdown started with inflation, and the bulls may avoid Wall Street until the US Fed controls the price rise, which it is doing by raising rates.
In a bull market, it is ideal for investors to profit from rising prices by purchasing stocks as early as possible in the trend and then selling them once it has peaked.
Directional price trends: A bull market is confirmed by an upward trend with higher highs and higher lows, whereas a bear market is confirmed by a downward trend with lower highs and lower lows. Many technical analysts use historical price trends to forecast the future.
Even if stock prices have increased a little since the summer, our experts predict that the bear market will continue to be volatile before hitting a bottom later in 2023. Before a long-lasting rise in stocks begins, they anticipate interest rates to peak and the slowing of economic growth to settle. last day
According to CME Group, professional investors believe there is an 86% possibility that the Fed will increase interest rates by another 1% by June 2023. Wall Street analysts see a 1.7% drop in S&P 500 earnings in the fourth quarter of 2022 and just a 1.7% increase in the first quarter of 2023.
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