How do individual investors adjust trading behaviors
during bull and bear markets?
April 2003 by John Bajkowski AAII's interpretation of the CAN SLIM approach has been one of the most consistent and strongest - performing screens
during both bull and bear markets.
It's called Effective Financial Planning Becomes Impossible
During Both Bull and Bear Markets.
Investors are inclined to do the opposite, as you can confirm with a glance at fund flows between equity and bond funds
during bull and bear market runs.
Not exact matches
However, although sharp corrections are somewhat rare (they have only occurred in nine years since 1962), they have happened more often
during bull markets than
during bear markets,
and thus have often presented buying opportunities historically.
Using weekly worldwide normalized search volumes for «XLF» (for the «Finance» category only)
and XLF weekly dividend - adjusted prices
during July 2007 through most of July 2012 (260 weeks),
and weekly worldwide normalized search volumes for «
bull market»
and «
bear market» (across all categories)
and S&P 500 Index weekly levels
during January 2004 through most of July 2012 (446 weeks), we find that: Keep Reading
, San - Lin Chung, Chi - Hsiou Hung
and Chung - Ying Yeh examine the predictive power of investor sentiment for different kinds of stocks
during bull (low - volatility, expansion)
and bear (high - volatility, recession) equity
market regimes.
The object is to be in stocks that are leading the
market higher in
bull markets,
and if you are not opposed to short selling, being short in the weakest stocks that are leading the
market lower
during bear markets.
Nobody should be surprised that after having totally missed the fourth longest
and fifth most powerful
bull market of the last 100 years, the
bears draped into professor Shiller's CAPE would decide to do a more thorough inspection of the fabric that made them so comfortable
and confident
during the past several years but which is making them feel totally naked now.
Using the Mr. Money Mustache Simple Math method, you'll mostly retire
during a
bull market,
and often
during the last part of the
bull market, right before the peak
and the next
bear market!
They apply a regime switching model to the Chinese stock
market to identify: a normal
market during January 2005 through August 2006; a
bull market during September 2006 through October 2007;
and, a
bear market during November 2007 through November 2008.
To determine whether a prospective mutual fund is a fair weather fund, simply compare the fund's relative returns to the
market index
during both
bear and bull markets.
In the introductory text for Part I of their 2016 book, Adaptive Asset Allocation: Dynamic Global Porfolios to Profit in Good Times —
and Bad, Adam Butler, Michael Philbrick
and Rodrigo Gordillo state: ``... we have come to stand for something square
and real, a true Iron Law of Wealth Management: We would rather lose half our clients
during a raging
bull market than half of our clients» money
during a vicious
bear market.
Conceptually,
market timing is simple, buy
during bear market lows
and sell in
bull market highs.
The psychology underlying
bull and bear markets is why P / E ratios expand
during bull markets and contract
during bears.
Remarks: Due to their conceptual scope —
and if not explicitly stated otherwise — , all models / setups / strategies do not account for slippage, fees
and transaction costs, do not account for return on cash
and / or interest on margin, do not use position sizing (e.g. Kelly, optimal f)-- they're always «all in «-- , do not use leverage (e.g. leveraged ETFs), do not utilize any kind of abnormal
market filter (e.g.
during market phases with extremely elevated volatility), do not use intraday buy / sell stops (end - of - day prices only),
and models / setups / strategies are not «adaptive «(do not adjust to the ongoing changes in
market conditions like
bull and bear markets).
Nimble asset allocation should help to minimize your losses
during bear markets and maximize your gains
during bull market — at least in theory.
In looking at all sides of the argument about share repurchases, one could say that companies that were repurchasing their own shares
during the
bull market of the 1990s looked smart as the value of their shares continued to go up,
and foolish a decade later in the
bear market of the 2000s as their shares declined in value.
This technique generally works only in
bull markets,
and can work in flat or choppy
markets, but you need to avoid the technique
during bear markets.
Even though this is a relatively short time span, the 26 calendar years since 1989 include two major
bear markets, two strong recoveries
and a strong U.S.
bull market during the 1990s in which the S&P 500 outperformed all its competition.
One can make more profit
during a
bull market, when the value of stock
markets is high,
and less profit
during the season of the
bear market, when the value of stock
markets decline.
During that period there were three
bull markets and two
bear markets.
The
bear market returns are generally comparable for all of the screens
and indexes; however, the Graham Enterprising Investor Revised screen has really shone
during the most recent
bull market which was calculated from the end of February 2009 through March 2012.
Even though the current
bull market is in its eighth year
and is the second - longest
bull market in U.S. history, the downside protection the DRS generated through the
bear markets of 2000 - 02
and 2007 - 09 have compensated for its underperformance relative to the S&P 500
during the last several years.
The examples above highlight this strategy by demonstrating the potential of these accounts
during bull markets and the security they provide
during bear cycles.
This is true in
bull markets and is especially true
during bear markets.
During secular
bear markets, there are shorter - term cyclical
bull (upside) moves, but the general trend is sideways
and down.
Some sectors do well in
bull markets but poorly in
bear markets, while others can grow earnings even
during sluggish periods
and recessions.
People invest more aggressively
during bull markets and more conservatively in
bears not because their appetite for risk has grown or shrunk, contends Davey, but because «their perception of risk has changed.»
They often get you out of the
market during bear markets and get you back in to ride the next
bull cycle.
These funds underperformed
during the
bear market of 2008/2009
and are underperforming in the
bull market we are seeing now.
Most financial professionals will encourage you to stay the course or even invest more
during corrections
and bear markets to reap the fruits of the
bull markets that will inevitably follow.
I used Ed Easterling's definitions for the timing of long lasting (secular)
Bull Markets and Bear Markets during the twentieth century.
Rebalance once yearly
during bear markets and every other year
during bull markets especially in taxable accounts.
High beta stocks tend to have bigger gains
during bull markets and bigger losses
during bear markets.
Earnings Growth Forecasts May Require a Robust Economic Recovery Secular
Bear Markets and the Volatility of Inflation Trading Volume Separates
Bull Markets from
Bear Rallies A Stock
Market Rebound Closely Linked with Economic Data Surprises
Market Valuations
During U.S. Recessions Stock
Market Valuations Following the Great Moderation Will Global
Markets Take Their Lead from the U.S.?
Trend following, as I have discussed vehemently
during my presentations with the STA
and MTA, has to be judged over a full economic cycle (or a
bull -
bear market cycle, if you wish).
This period includes two major
bear markets, two strong recoveries
and a strong U.S.
bull market during the 1990s in which the S&P 500 outperformed all its competition.
And while these leveraged ETFs will eventually recover during the next bull market, it's still a gut wrenching experience to buy and hold leveraged ETFs during bear marke
And while these leveraged ETFs will eventually recover
during the next
bull market, it's still a gut wrenching experience to buy
and hold leveraged ETFs during bear marke
and hold leveraged ETFs
during bear markets.
I spend time educating my clients on
bull and bear markets,
and do «life boat training»
during good
markets, so they are ready for a
market crash.
By holding a wide variety of asset classes, investors have historically enjoyed smoother gains
during bull markets and gentler losses
during bear markets.
Generally you see P / E expansion
during bull markets and P / E contraction
during bear markets.
This may save investors from losing a little here
and there in
bear markets, but they're also going to miss out on profits
during bull markets.
As you can see, there were strong cynical
bull and bear markets during this time that caused the
market to essentially remain flat for 16 years.
As you can see, there were cyclical
bull and bear markets during this long term secular
bear market.
In the article The psychology of
bear markets published in December 2009,
during the brunt of the
bear market James Montier writes about that the mental barriers to effective decision - making in
bear markets are as many
and varied as those that plague rationality
during bull markets but that they more pronounced as fear
and shock limits logical analysis.
They apply a regime switching model to the Chinese stock
market to identify: a normal
market during January 2005 through August 2006; a
bull market during September 2006 through October 2007;
and, a
bear market during November 2007 through November 2008.
Opti is a truly unique token that has the ability
and potential to actually sustain or grow in value
during bear currency
markets, as well as in
bull ones.