Written by Abdul Haleem Salem
Monday, 05 June 2023 02:00 AM
From time to time, investors hear terms like bear market and bull market to describe certain movements in the stock markets.
Both terms can be roughly defined as a bear market when stocks are falling and a bull market when stocks are rising, but the matter is not without some details.
During a bear market, there is a sharp decline in prices Stock prices Investor confidence falls and risk prevails, while in a bull market, stocks see continuous gains and increasing confidence among investors, reflecting a strong economic environment.
More precisely, a bear market is a decline in a stock index of 20% or more from its recent high.
On the other hand, according to CNBC Arabia, the bull market has seen a 20% rise in the stock market since recent declines.
How can you invest in a bear or bull market?
As an investor, one must understand both bear market and bull market scenarios to decide what to do with his money.
Bear market investors tend to liquidate their investments during this time to avoid the risk of losing more money.
On the other hand, investors can sell in a bull market Bull market They can make a decent profit from some of the stocks they own or wait for the stock to go higher in the future.
Although it is easy for investors to know what is happening in the market, experts generally advise to leave investments for a long period of time and not watch the portfolio to avoid fluctuations in the market.
Of course, the investor has a natural instinct to immediately respond to what is happening in the market and try to minimize losses or take profits, but it is better to avoid any sudden reaction as much as possible (according to expert advice) .
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