牛市,熊市,及其它(轉貼)

Bulls, bears and other animals
CBC News Online | June 13, 2006

Taking stock of the market

Dec. 31, 1957 - Toronto's stock exchange sits at 447.81, the lowest level in the past 50 years.

April 19, 2006 - the TSX 300 Index hits 12,494 at one point during the day, the highest level ever for the Toronto exchange. In between, there have been many ups and downs. Some short and steep, others gradual and prolonged.

Bulls and bears - feeding on greed and fear.

BULL VS BEAR MARKETS
DATE	MARKET TYPE	# OF MONTHS	PERIOD RETURN
July 1960 - May 1969	Bull	107	203%
May 1969 - June 1970	Bear	13	-23%
June 1970 - Oct. 1973	Bull	40	82%
Oct. 1973 - Nov. 1974	Bear	13	-33%
Nov. 1974 - April 1981	Bull	77	266%
April 1981 - June 1982	Bear	14	-37%
June 1982 - Aug. 1987	Bull	61	253%
Aug. 1987 - Nov. 1987	Bear	4	-25%
Nov. 1987 - April 1998	Bull	125	247%
April 1998 - Sept. 1998	Bear	5	-26%
Sept. 1998 - Aug. 2000	Bull	23	106%
Aug. 2000 - Sept. 2002	Bear	25	-43%
Sept. 2002 - Sept. 2005	Bull	36	90%
Average duration of bear markets		12
Average duration of bull markets		66

What is a bull market?

It's a prolonged rise in the prices of stocks, bonds or commodities - generally accompanied by feelings of economic optimism. There's no minimum length of time that a bull market lasts. It could be from a few months to several years. Bull markets are characterized by high trading volume - everyone wants in when prices are rising.

If you're invested in the market - and most Canadians are (through Registered Retirement Savings Plans and/or company pension plans) - you tend to feel like you're getting wealthier. You may very well be. It's a good feeling - and you want it to continue.

You begin to believe that double digits returns are the norm - even though the historical average return on stocks is six to eight per cent.

Over the last half century, the average bull market has lasted 5?years and added anywhere from 82 per cent to 266 per cent to the market's value.

What is a bear market?

It's the opposite of a bull market. Prices fall over a prolonged period of time. Again, there's no set time but bear markets generally run from a few months to several years.

A bear market in stocks in usually brought on by worries that the economy will fall off. A bear market in bonds is caused by rising interest rates.

Markets are susceptible to the emotions of the people who invest in them, so the fear of losing a little money could trigger the potential to lose a lot of money. But that's only if you're afraid enough to pull out of the market.

Over the last half century, the average bear market has lasted 12 months. The shortest - four months between August and November 1987 - included the Toronto market's biggest one-day crash. Bay Street stocks lost 22 per cent of their value on Monday, Oct. 19. But that brief bear market ushered in the longest bull market in the exchange's history. The bulls ran for almost 10?years, resulting in an overall return of 247 per cent.

The average bull/bear cycle has lasted just over six years.

What is a correction?

Sometime stock prices rise a little too quickly. In a correction, the market will be hit by a sudden drop of 10 to 20 per cent. It could come on one trading day, or it might happen over a few trading days.

October has traditionally been a month during which downward price trends occur. By Oct. 20, 2005, the TSX index had fallen about eight per cent for the month, mainly due to volatility in energy stocks. That same volatility had the exchange flirting with new highs by the end of September.

Corrections sometimes precede bear markets. They can also be a very short downward trend in a prolonged bull market.

What is a bubble?

When markets are fuelled by speculation, and the bull is charging ahead, prices may have hit unrealistic highs. In the late 1990s, U.S. Federal Reserve chairman Alan Greenspan complained of an "irrational exuberance" that was driving the markets.

Many thought he was wrong. After all, high tech was driving the world and it was only natural for the stock of any company that had the remotest of relationships to computers or the internet to be making huge gains. The NASDAQ index - the market that specializes in high tech companies - had surpassed the 5,000 mark.

That was a bubble that was deflated very quickly. From a high of 5049 on March 10, 2000, the NASDAQ index fell to 1423 by October 2001. It took until the middle of 2005 for the index to break back through the 2000 level.

What is an ostrich?

Besides a flightless bird that sticks its head in the ground as a defensive mechanism, an ostrich is an investor who "sticks his/her head in the ground" when market danger signs abound. Ostriches don't learn from past trends.

What is a hog?

A greedy investor. A hog will throw more money at the market, hoping to make even more money - even though the warning signs are there.

Can I time my investments to take advantage of the rise and fall of the market?

You could try - but you probably have a better chance of winning the lottery. Studies have shown that the biggest gains come on a handful of trading days. Miss those days and you could miss the benefit of holding investments during a long bull market.

Money managers will advise that investing in the market is part of a long-term strategy to achieve moderate gains.

But if you want to speculate, you should have a clearly-defined strategy in place: buy or sell when your stock reaches a predetermined price, either on the way up or on the way down.