The Bulls And Bears Game: Risks And Survival Strategies In Investments


by Wain Roy - Date: 2007-01-17 - Word Count: 492 Share This!

The stock market is never constant, but one thing that is constant in the bulls and bears game is this question in people's minds as to how to make money with investments. Price movements keep changing the character of the stock market and the bulls (buyers) and bears (sellers) oscillate from financial highs to lows.

A bull market time in the stock market is when prices are steadily rising, outdoing past averages, accelerating optimism among investors and thereby raising their confidence. A bear market is the opposite, a state of pessimism when prices are falling by 20% or more in a key stock market index from a recent high over a minimum of two months. Evidently, investors indulge in some amount of risk as they invest. Nevertheless, the stock market never wanes in economic importance because it is a significant money-making arrangement for the big business houses.

Risks

You may have numerous investment opportunities to choose from. But it is always advisable to keep a watchful eye while choosing which company to invest on and how. A little less careful and you may walk into one of those fraudulent investment networks across the world. First and foremost, be wary of too many attractive offers like 'huge profits in no time' or 'zero risk involved' etc. Some opportunities even flaunt lofty claims of IRA approvals, tax-free offshore investments and more. Chances of these being authentic are close to nil. Other investment opportunities will assure you of a perfect offer that will reap good returns. Yet some others may pressurize you to act promptly, saying that the market is moving. In either case, do your homework. Get detailed information of the company, the fees involved and never share your bank information or personal financial details with anyone unless you are completely sure.

Strategies

Once you are clear on mind about the potential risks in the bulls and bears trade, it is time to plan strategically. There are two rudimentary approaches to investing money and being successful with that. These are: the fundamental analysis and the technical analysis. The former focuses on the analyses of the financial statements of companies, available in SEC Filings, market trends and more. Technical analysis involves market studies of the price actions, with the help of stock market charts and other quantitative methods to forecast future trends.

Besides these two base strategies, there is the index method strategy, in which one has a weighted or non weighted portfolio of the whole stock market or a part of it. This strategy helps to maximize diversification and minimize taxes on very regular trading, apart from ensuring a position in the general stock market trend.

Yet another, often unethical, survival strategy for investment is the insider trading method. In this, the investor has to rely on inside information.

AUTHOR BIO:

Wain Roy is an internet marketing professional expert in various industries like real estate, finance, medical tourism and daily stock market charts


Related Tags: stock, market, profit, investments, risks, strategies, bull, trader, charts, daily, watchlist, editorials

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