How to know that the bear market is over

Chasing the stock market can feel like whiplash: IDepressed and depressed, And energetic and exciting, Came back under Also.But if you paid a little attention last year or so, you probablyy It’s generally not a good time to check your investment account balances, as you know that the overall trend is negative.

One of the key indicators for measuring the stock market, the S & P 500 entered the bear market in June, but has since entered the bear market. Seemed to gather Recently, with the rise of both the Dow Jones Industrial Average and the Nasdaq Composite Index.The index is 10% increase from low last month, At the time of writing this article.

Unfortunately, Some analysts It is unlikely that it has bottomed out yet, and these little flicker of hope are Sucker rally— A short rise that attracts some buyers but quickly reverses the course. So how do you know when the rally will turn to recovery and when the bear market will withdraw?

How to know when the bear market will end

The short and satisfying answer is that there is no definitive way to predict whether the bear market will end or continue to rise.

“It’s a fool’s job to try to time the market. It’s very difficult to determine when the bear market will end, “said Matt Gray, financial planner and founder. AnthroFi Wealth Group In Colorado.

Gray explains that signs of people wanting to repurchase, such as above-average transactions and positive markets, indicate potential, but buyer sentiment can still fluctuate significantly. ..

Longer rallies that stick often require policy or systematic shifts such as interest rate and regulatory changes. Compare with short-term rallies that are likely to occur based on news or consumer sentiment.

It is also important to recognize that meetings are relative. AA day or hour bump may be good news for the day-As a trader, it has no significant impact on long-term investments.

Anyway, what is the bear market?

Strictly speaking, “Bear market“” Means that the price of securities such as stocks has fallen by 20% (or more) compared to recent highs. According to Gray, the phrase is also more widely used to indicate that the market has fallen to the point of worrying investors.

The bear market can last from weeks or months to years or even decades. The former characterizes the periodic bear market and the latter is called the secular bear market.

A Bull marketIn contrast, price increases continue for a long time. This is also specifically defined as a 20% rise following two separate 20% declines. The bull market can also last for months or years.

“The bear market usually closes before the economy turns around, which can confuse why the market rises when things are very bad,” says Gray. He also adds that the bear market is ultimately short-lived and offers buying opportunities.