BULL MARKET

increase in market share

prices
the economy is great,
people are finding jobs,
gross domestic
product (GDP) is
growing,
stocks are rising.
If a person is optimistic
and believes that stocks
will go up, he or she is
called a "bull" and is said
to have a "bullish
outlook".

BEAR MARKET
stock prices are falling
the economy is bad,
recession is looming and
low investor confidence

If a person is pessimistic,
believing that stocks are
going to drop, he or she
is called a "bear" and
said to have a "bearish
outlook".









WHERE DID THEY GET THEIR NAMES.?


BULL BEAR
A bull will thrust its horns up into the air.
Trend up.
A bear will swipe down.
Trend down.
CHARACTERISTICS OF BULL AND BEAR MARKET
Supply and Demand for Securities
Bull Market:
strong demand & weak supply for securities.
share prices will rise due to competition.

Bear Market :
more people are looking to sell than buy as demand is lower
than supply .
share prices drop.
CONT
Investor Psychology:
Bull Market:
Investor interested in the market
& participate in the hope of
obtaining a profit.
Bear Market :
the decline in stock market
prices shakes investor
confidence.





CONT..
Change in Economic Activity:

Spend
more
Profitable business
Bull market
Spend less Loss in business
Bear market
SECULAR MARKET TREND
trend is "bullish" or
upward moving.
trend is "bearish" or
downward moving.
Secular bull market

Secular bear market

SECONDARY MARKET TREND
short-term changes in
price direction
duration is a few weeks
or a few months.
correction is a short
term price decline of
5% to 20% .
bear market rally
market price increase
of 10% to 20%.
PRIMARY MARKET TREND
Duration is a year or more.
Bull market
Bear market
Market top
Market bottom

CONT
reached the highest point

the end of a market downturn
Market top Market bottom
MARKET CAPITULATION
threshold reached after
a severe fall in the
market.
investors capitulate
(give up) and sell in
panic
further decline in the
stock's price
good time to buy
stocks.
BULL AND BEAR LINE
index average line that
indicates bull
market or bear
market in stock market.
Bearish :current index
drops below the bull-
bear line
bullish : current index
rises above the line
WHAT DRIVES BULL MARKETS?

high
employment
Strong
economy
New
technology
Bull Market

WHAT DRIVES BEAR MARKETS?

Discouraging
Economy
Unemployment
Wars & Others
Bear markets


How to Predict Bull And Bear
Markets?

CONT..
Bull market
country wages a war
increase demand for
securities
smaller supplies of
securities
increase interest in the
stock market
News
Bear market
Sudden international
crises
decrease demand for
securities
Higher supplies of
securities
investors are not very
confident and invest less.
News







INVESTING DURING BEAR AND BULL MARKETS

buy stocks as the market
gets bullish, and sell when
prices reach their peak.




Buy stocks in bearish
market at low prices,
to set up long-term
investments

HOW TO PROTECT OURSELF FROM BEAR MARKET?
Play Dead - Stay on the Sidelines

Putting a larger portion of
your portfolio in the form of
money market securities .


Certificate of deposits

buy when the right buying
opportunity comes along.

stay calm and dont make
any sudden moves.



Treasury bills
CONT..
Value Stocks
buying opportunity for investors
valuations of good companies
get hammered down.

Short Selling
A short position allows an
investor to profit as the stock
heads downward.

CONT..
Bonds and Asset Allocation
invest in assets or asset classes
which meets best the needs
and objectives of the investor.
portfolio spread - stocks, bonds,
cash and alternative assets.

Defensive Industries
performs better than the overall market during bad times.
Eg. toothpaste, shampoo, shaving cream, etc.
Provides defense to the portfolio.
BULL MARKET - CASE STUDY

India's Bombay Stock Exchange Index, SENSEX, was in a bull
market trend for about five years from April 2003 to January
2008 as it increased from 2,900 points to 21,000 points.
BEAR MARKET CASE STUDY
A bear market followed the Wall Street Crash of 1929 and
erased 89% (from 386 to 40) of the Dow Jones Industrial
Average's market capitalization by July 1932, marking the
start of the Great Depression.