![]() |
Image taken from http://beginnersinvest.about.com |
The market has been going down month by month and day by day. According to this month's Truly Rich Club (TRC) Stocks Update, COL Researches are seeing signs of a bear market.
You might have heard of the terms Bull and Bear Market. Let's look at how they are defined.
Bull vs. Bear Market
According to www.investopedia.com, it is a bull market when prices are rising or are expected to rise. We experienced a bull market early this year when we hit 7000 level and more.
A bear market, on the other hand, is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining (www.investopedia.com). This is the time when the market is down or is expected to be down for months or longer.
Is Philippine Stock Market in the Bear Market already?
There are three prerequisites for a market to be defined as a bear market, as per our TRC Stocks Update:
1. Its index must drop 20% from its high.
2. Downturn is also seen in other broad indices (ex. PASHR or the Philippine All Shares Index)
3. The drop is carried over a 2-month period or more.
So far, the first two prerequisites have been satisfied but not the 3rd one yet. Though this is the case, the market is still showing a downtrend which has been caused by some events such as US Fed Tapering, Typhoon Yolanda destruction and Foreign investors continued selloff.
What to do during a Bear Market?
For short-term investors, a bear market might not be a good time to invest. This is because the market might be down for a long period which means profit-taking will be very hard during this time.
For long-term investors (such as Truly Rich Club members), we are taught to take this event, when the market is down, as an opportunity to buy great companies at a cheaper price. TRC provides a list of companies that we should invest in and what prices are to be considered for buying and selling shares. So as long as it is within the "Buy Below Price", we continue to accumulate shares at a regular basis (can be monthly or weekly depending on your fund availability).
![]() |
Image taken from http://treehouseonline.com |
If you are planning to be a long-term investor, this time of the year is a good opportunity to buy. Get that extra cash left from your Christmas bonus or incentives, and open an account in COL Financial. To get updates and guides on what stocks to buy and at what price to buy or sell the shares, you can also visit the Truly Rich Club page and join to receive monthly stock updates.
For long-term investors, this is our planting season. Don't miss the opportunity.
-Psalm 126:6 (NIV)
May Success be to you,