[Summary]
Bear (bearish market) is a term used to describe a market in which there is strong concern that prices will fall.
The advantage of a bear market is that it does not guarantee profits, but that it makes it easier to sort out the things you need to look at.
In actual investment, the starting point is to manage your funds and organize your buying candidates during a downturn. However, you need to be careful that if you sell everything based on pessimism, you will easily miss the rebound.
In this article, we will explain bear (bearish market) not as "knowledge" but as a step to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
First, divide by bear (bearish market)
When looking at a bear market, first determine what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. A bear market is not the only factor in making a decision. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Don't overestimate the benefits of bear markets
If you want to look at bear markets as an advantage, first make narrow assumptions. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
If you check the following points, things will be much more organized.
| Axis to check | What to see in a bear market |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
It's not just a lack of knowledge that stumbles during a bear market. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Decide first what you will see in a bear market
- Differentiate between conditions that bring about benefits and conditions that do not.
- When expectations are too high, test with a small amount
- Write down the terms of withdrawal before considering profits.
The important thing here is not to settle on only one correct answer based on a bear market. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before using the bear market as a basis for making an actual decision, check at least these five things.
- Can you explain in one sentence the purpose of watching a bear market?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking for bears is not to act faster, but to reduce unnecessary errors in judgment.
Summary
Bear (bearish market) is a material for organizing investment decisions. Even if you read it as an advantage, treating it as a stand-alone buy/sell signal will make your judgment difficult.
The points to keep in mind are as follows.
- Decide first the purpose of viewing a bear market
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. Bear (bear market) should not be used as a word to rush into judgment, but rather as a tool to pause before buying or selling.