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What duration of time defines a bear market?

A bear market is a period of time in which the prevailing stock prices trend downward by more than 20% for at least two months.

What is a "correction"?

A correction occurs in the stock market when the trends of indexes show a decline in prices of 10-20% over a short period of time, from one day to less than two months.

Are corrections good for some investors?

Some investors look at corrections as buying opportunities, as often overvalued stock prices are reset to a lower level, representing their true value, and giving investors an opportunity to buy at a lower price. These same investors will typically have ready access to liquid assets, such as cash, in order to take advantage of the perceived bargain during a correction.

What are some of the greatest declines of the Dow during a bear market?

In October 2007, the Dow entered a bear market that lasted 517 days, and saw the DJIA decline by 53.9%. By contrast, the initial 1929 Dow crash, that heralded the Great Depression, saw a decline of "only" 47.9%, and lasted 71 days.

What is a "bull market"?

A bull market is a period of time during which there are more buyers than sellers of stocks, causing overall stock prices to rise, and when investor confidence trends higher in anticipation of rising prices, increasing their investments over time.

Periods of stock market prosperity are called bull markets.

Periods of stock market prosperity are called bull markets.

How long does a bull market last?

Through the year 2009, and for the 113 years since the inception of the Dow, the average length of a bull market has been 2.7 years.

How much personal wealth was lost during the Crash of 2008?

Eleven trillion dollars of Americans' personal wealth, whether in the form of stocks, bonds, cash, or real estate, was wiped out in a very short period of time.

What percentage of Americans saw their portfolios decline during the period of economic decline 2008-2010?

Thirty-five percent of all Americans saw a decline in their personal investments.

 
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