Should investors dread a bear market?

Team Veye | 22-May-2022 bear market

All great achievements require time. Time duration varies from person to person. But one thing to always remember is NEVER GIVE UP.

When investors repositioned for higher interest rates and a potentially faster rate rise cycle as indicated by Fed, Australian shares fell and broadly followed Wall Street. The turmoil in the stock markets globally shook the confidence of many an investor.

It is common knowledge that wealth creation is a continuous process. There will be periods of stagnation, when your real conviction gets tested. Investors tend to forget that all good things come to an end and all bad things eventually settle & lead to a good start. Stock market operates with this simple principle and the cycle repeats time and again.

A big mistake in market is forcing trades when there is none. If there is nothing to trade, don’t search for the trades. Wait till a proper set-up pops and the market offer you an opportunity.

It is often advised that follow the indicators as it is believed that charts tell the price action of an underlying stock. True, indicators are like information in a car dashboard; But of what use the info on the Dashboard is if you do not know driving.

Drawdown phases are unavoidable but we can try to make them shallow and shorter. Trade the price! Not the market Sentiment.

What’s important is the need to take this period as an opportunity to build future wealth, rather than letting fear take over. The opportunity to invest will continue throughout such phase although trying to catch the bottom could be futile. Eventually, a bear market may end up helping you more than hurting you.

"Bear markets are normal and necessary and serve to clean up prior excesses. They also allow the market to create a whole new set of chart bases and leaders for the bull market that, in time, always follows." - William J. O'Neil.

Disclaimer

Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.

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