Dear Financial Voice Reader,
Wouldn’t it be great if since the start of the year your pension was up 58% to 88%. Well that is what NVIDIA, Meta (Facebook), Tesla and Warner Brothers are up. And I hold all of those in my SIPPs and ISAs.
In fact, these are some of the S&P500 (Largest 500 US companies) companies in my portfolio.
But many don’t even know how to open an ISA, what one is, that you can in a SIPP (personal pension) have US stocks or how to go about it. All of these things worry me – the state of financial ignorance and therefore people being left behind in their savings. It’s why I launched my Campaign to teach a million people to be better investors; www.campaignforamillion.com.
By the way Apple is 31% this year, Microsoft and Alphabet are up 21% in my portfolio. I share all this on my Telegram channel and readers of this paper are well come to see this (all free) – www.alpeshpatel.com/links - I want you to succeed.
But what about all the doommongers talking about ‘bear markets’? Well in this market even though more than half of the 500 largest US companies are up, you cannot pick any random stock and expect to be safe, and some of the biggest movers have peaked for now too.
But I do not think we are in a bear market any longer.
A bear market is a sustained period of declining asset prices, typically marked by a 20% or more drop in the market index from its recent high. It is characterized by negative investor sentiment, pessimism, and a general lack of confidence in the market. Bear markets can be triggered by various factors, including economic recessions, high inflation, political instability, natural disasters, or financial crises.
Bear markets can be short-lived or last for an extended period, depending on the severity of the underlying issues. During a bear market, many investors may sell their assets, leading to a vicious cycle of further price declines and more selling. Some investors may attempt to profit from bear markets by using short-selling strategies, which involve betting on the decline of asset prices.
Bear Market Traps:
A bear market trap, also known as a "sucker rally" or "dead cat bounce," is a temporary, often short-lived, reversal in the downward trend of asset prices during a bear market. In this situation, the market experiences a brief period of increasing prices, leading some investors to believe that the bear market is over and a new bull market is beginning. However, the upward trend proves to be a false signal, and the market continues its downward trajectory after the rally.
Bear market traps can be particularly dangerous for investors who are lured into buying assets based on the false hope of a market recovery, only to see prices continue to fall. To avoid falling into a bear market trap, investors should be cautious when interpreting short-term price movements and look for more substantial evidence of a market turnaround, such as improving economic indicators or positive changes in the factors that initially caused the bear market.
