Investors are having a rough time since the start of 2020. The coronavirus has made the market quite volatile. There were some violent moves up and down in stock markets as the oil prices crashed a whopping 30% in early March. It seems like the current pandemic has ended the longest bull market in history, which means we are now in an official bear market.
If you are new to these things you should know that these terms are the only lingo, there are no animals involved here. Following, we will describe both for you:
Bull Market means when broadly things are being set up for an extended period. Last time, the bull market started some 11 years ago when the S&P reached 500 points (the lowest in history) during the recession in 2009. The length of broadly upward movement means it was the longest bull market in the history of the US. Not to mention the issue with the oil industry, as oil prices have hit their lowest point in history as well, you should keep things in mind whine comparing the tariffs of different energy providers. The market is continuously shifting, so be careful.
Going on the Bear Hunt
Every market crisis is different but it does present people with the opportunity to buy stocks at cheap and make money in the long run. The point being, investors hold on long enough for the market to rebound and market resume its operations.
To be honest, these are a bit confusing times because the worst could still happen. Most investors right now are caught in the fight between whether they should buy a dip to they should be prepared for seeing a dead cat bounce. Among these, the investors are also curious whether they should be careful with a falling knife. Don’t worry, these things will be unpacked to a well throughout our investment plan, but we will need to wait for a while before it does that.
What Should Long Term Investors Do?
The question that comes to every long term investor is when the value starts to appear and they can resume selling again. For those who are new investing, they should know the threat these falls are unprecedented. No one can see them coming, but they end up leaving the market in a far more profitable state. The recession in 2008 and increased the marketplace of the stocks since then.
There are a lot of things going up a down in a single trade. You need to get a grip on these things if you want to survive the ever-changing financial marketplace.
No one knows how the covid19 will unfold but the investors care carefully watching the stock markets and the respective response from both governments and central banks.
The Federal Reserve pumped money into the system back in 2008 to keep things afloat. They did the same thing again to support the market. Let’s see how long these institutes can help keep the economy stable.
Disclaimer: This content does not necessarily represent the views of IWB.