Wednesday 22 October 2008

What is a bear market?

It is a situation whereby share prices keep on falling lower and lower.

Although at a certain point in time share prices will head for a rebound, the rebound normally will not be sustained.

Thus, the downward escalation of share prices resumes as bad news keeps surfacing one after another.

Investors and speculators become jittery and sell their shares at a loss.

Bad debts become the order of the day and lawyers are busy issuing demand letters.

Suddenly, those smiling faces are replaced with sadness and a solemn mood.

Brokers also find themselves in trouble when clients fail to settle debts.

STOCK MARKET INDEX ----> falling -----> Low ------> New Lows----->

Scenario:
Bad news abound
Forced selling by brokers
Bad debts to be collected
Sad faces around

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