When the stock market surges (when there is a Bull Market) may people make money just because they are swept up in the market surge. When there is a Bear Market (a market in which sellers outnumber buyers) it is more difficult to “jump on the bandwagon” and make money. In a Bear Market you really have to focus your investment dollars.
Here is a chart I found at The Big Picture.
There are two points that I take away from this chart.
- Bear Markets last a long time.
- We are in a Bear Market right now and it will probably last a while.
What does this mean for us? It means that we need to do our homework. We really need to look deeply into market sectors, industries and companies before we invest our dollars. We have to dig deeply and make sure we have a full understanding of what we are getting ourselves into.