Small-cap stocks often lead the upward trend, followed by active sector rotation, with market hotspots continuously emerging, forming a virtuous cycle where multiple sectors rise one after another, driving the overall market up.
Investors can adopt a more proactive strategy, such as appropriately increasing positions, participating in hot sectors and strong stocks, as well as diversifying investments across different industries to spread risk. Due to the overall rise in stock prices, chasing high strategies are relatively feasible, but profit targets and stop-loss points need to be set, and investment portfolios should be regularly evaluated and adjusted.
A bear market appears
The main signs of a bear market include:
① The rate of increase in stock prices slows down;
② Bond prices plummet, attracting many stock investors;
③ Due to the lure of the preceding stock rise, a large number of novice traders flock to the market for stock trading, indicating that the arrival of a bear market is not far away;
④ Investors shift from riskier stocks to safer bonds, indicating a rise in pessimism towards the stock market;
⑤ Companies borrow large amounts of money due to urgent short-term funding needs, causing short-term interest rates to equal or even exceed long-term rates, leading to reduced corporate profits and falling stock prices;
⑥ Utility companies have a large demand for funds, and the stock price movements of these companies often lead other stocks, making their price drops a precursor to bearish sentiment in the overall stock market.
Bear market: The market is generally pessimistic, the downturn lasts relatively long, the overall trend of price changes continues to decline, characterized by large drops and small rises, stock prices generally fall, the market is overall weak, indices continue to decline, frequently setting new lows, and the downtrend may last for months or even years.
Investors are generally pessimistic, lacking confidence, with a pervasive sense of panic, tending to sell stocks, fearing that the stock market decline will trigger large-scale sell-offs. Market trading is relatively quiet, with trading volume often shrinking as prices fall, and funds continue to flow out of the stock market, such as increased fund redemptions, net outflows of foreign capital, and declining financing balances.
Often associated with economic slowdown, declining corporate profits, or other negative economic news. The economy may face recession or slowed growth, with declining corporate profits, poor macroeconomic data, high interest rates, and tightening policies increasing borrowing costs, suppressing investment.
Most industry sectors decline, lacking strong sectors that continue to rise, and the market shows a broad decline.
Investment strategies should be more conservative, focusing on asset preservation. One can control positions, increase cash or cash-equivalent holdings, and wait for better investment opportunities; one can also look for undervalued quality stocks for value investing, but should avoid blindly trying to catch the bottom.
Someone said I was always full of confidence before, clenching my fists, encouraging everyone, gritting my teeth, growing together, resisting external threats, waiting for the bulls and bears.
Since April 7, I have been bullish and optimistic, with dreams, hopes, and emotions intact, together fighting against tariffs. As a result, the meeting on May 7 didn't lead to much of a rise. On May 12, there was a global rise, but on May 13, 14, and 15, it still didn't rise much. Although the attacking power is not significant, the damage is substantial. It's like a small knife cutting flesh, painfully.
In the dead of night, calm and collected, one always asks: Let's analyze the bull and bear markets.
Bear markets and bull markets are two opposing market trends in the stock market, with the main differences as follows:
A bull market appears
The main signs of a bull market include:
① The number of stocks with rising prices is greater than the number of stocks with falling prices;
② When prices rise, the total trading volume of stocks is high, or when prices decline, the total trading volume of stocks is low;
③ Companies buy back a large amount of their own stock, resulting in a decrease in the total number of stocks in the market;
④ The inclusion of large corporate stocks among depreciators indicates that stock market prices are approaching the bottom;
⑤ A recent large number of short sales indicates a forthcoming bull market;
⑥ Securities companies lower the requirement for the proportion of their own funds for leveraged investors, allowing them to invest more capital in the market;
⑦ The government lowers the bank's reserve requirement ratio;
⑧ Insiders (management, directors, and major shareholders of companies) compete to buy stocks.
Bull market: Prices show a long-term upward trend, with the overall trend continuously rising, characterized by large rises and small declines, the average stock price continually setting new highs, and an overall wave-like ascent, although there are declines and adjustments, higher highs and higher lows will follow, meaning each wave is higher than the last. Generally, if the overall index or market accumulates a growth of more than 20%, it can be preliminarily determined that a bull market has been entered, and the upward trend lasts for a long time, with the duration of peaks and troughs usually not less than 4 months.
Investor sentiment is high and optimistic, with a strong willingness to chase high prices, holding a positive attitude towards the market outlook, and willing to take certain risks to buy stocks. Positive news is easily accepted and amplified in the market, with new account openings and new funds continuously flowing into the market, leading to active trading.
Often accompanied by positive macroeconomic indicators such as economic growth, increased corporate profits, and low unemployment rates. The economy is in a prosperous period, corporate profits are increasing, GDP growth, employment increases, low interest rates, and loose monetary policy support the rise of the stock market, reducing borrowing costs and encouraging investment.