Know for certain that the dark clouds can not impact the intrinsic glow of the sun, nor do they are capable of creating any setback to the effective functioning of the sun. Similar is the nature of the bear markets. Rarely do they possess the capacity to damage the market on a permanent footing. In a bear market, prices of stocks keep falling for a long period, for months, and sometimes may be for a couple of years. But, the history of the stock market tells us that the market bounces like a rubber ball thrown to the ground. The greater the power of the throw, the higher the ball will bump!
Know the reasons for the Bear Market but do not stop your trades
If the investors were to know the precise reasons for the bear market, they would have planned suitable remedies in advance. But, unfortunately that does not happen. Market is supreme, and none will be ever able to fathom why it behaves the way it behaves. Accept it in its true nature, whether bull or bear, and try to eke out the maximum advantage out of the given situation.
Bull and bear are the alternative beats of the same heart called the Stock Market. Instead of worrying why the bearish tendencies have crept into the market like economic recession, political developments like wars, slump in the demand for consumer products resulting in downward trend in the market, deliberate overvaluing of the stocks by the unscrupulous dealers etc, make good use of the available opportunities. With the glow of the torch, you can cover the darkest path.
How to find the hidden treasure?
- Act, do not react.
- Stay out of the selling stampede. Keep your cool.
- Mental strength takes the front seat, not the chart and analysis.
- The management of any company is more concerned about holding on to the fort, than you the shareholder. Trust them to negotiate the crisis, if you have trusted them in the past and thanked them to receive the dividends.
- There is panic in the market due to abnormal selling pressure. You need not follow the crowd. Wait and watch the shares in your portfolio. All your investments can not be bad.
- Do not read too much into the daily swings in the market. Your view needs to be medium term, if not long-term.
- Those who have a fair knowledge of the stock market history, know that market follows a cyclic trend. Market has always recovered and it booms finally, after the period of recession.
- Your concern should be not to sell, but what to buy for further gains, when most of the shares, including the blue-chips are available for rock-bottom prices.
- Revisit the stocks in your portfolio. Study them well. Take a short break from the stock market operations, to enhance your theory knowledge.
- If, after the detailed study, you come to the conclusion that you must sell a particular share, do so immediately, without wasting time. Selling is also an opportunity. Cash it without the confused approach.
- If you find nothing wrong with the balance sheet of the company, and all the indicators are good, do not sell the share, just because its price is falling. You will soon be rewarded for your patience.
- Stock market will behave strange—it will stumble, fall on its side, pick up speed, go into a shell, go sideways, go in circles etc. Just watch it from the gallery. It will do its best to confuse you.
- Bear market is a blessing; be ready to receive it.
- The tricks of the trades for taming a bull and taming a bear are the same!
- Three golden options in a bear market: Be optimistic, be optimistic and be optimistic!