Only an objective view on the economy and financial market can help you to face a Market volatility and uncertainty. You probably ask “How to get objective view?”. My answer is: Look into numbers, look into past and look into many sources from different authors, finally, always be a searcher!
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Longer you are on the market, the higher likelihood of profits you have.
Based on the past data, it’s “almost” certain that after 15 years with S&P 500 you will gain some profits.
But you have to be long term investor, not a daily trader.
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Capital gains tax can eat a good performance of your portfolio. You always have to take into account and calculate an impact of taxes in your country. Especially, when you are a trader.
For example, if you are live in Denmark, then 42% of your profit has to be return to your government, that’s a big factor you have to think about.
Sometime there are additional regulations, taxes or tax credits, which you have to be aware from your local perspective
A drop of more than 10% but less than 20%
When economic activity (measured by GDP) declines for two consecutive quarters
Represent a next market high and its prolongation after the market has fallen 20% or more.
A bear market represents a 20%+ decline from recent highs and can precede a recession.
Next to the Correction and Bear Marker, there is also the definition of Crash, very often used incorrectly as a counterpart of Bear Market, but there is little difference between both:
It’s a decline of 20% or more, what is similar to Bear Market, but Market Crash is quick and brief, while Bear Market is slow and prolonged.
* Numbers about Bull and Bear Markets refers to period from 1942 to 2021.
To know the statistics about market recovery is essential during facing of correction or bear market. This knowledge will give you enough confidence and composure to survive dificult times or even earn more in future.
It’s very difficult to anticipate how long correction will take or how deep it will be, when we are in. Nevertheless, based on the past data from US Market, it always result with reversion and upturn. But it’s about whole market and leading indexes, not always for particular stocks.
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