The bears have come and has refused to go, it has however left a lasting impression on the minds of investors. The Nigerian Stock market some months ago was the toast of investors but today the bears have detered investors confidence in it. Investors have watched their investments dwindle over a short period of time with different investors with his / her own ordeal.
When will it end is the question every investor seems to be asking. By definition, a bear market is when the stock market falls for a prolonged period of time. It is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market, selling continues, which then creates further pessimism.
Experiences such as these are generally what scare would-be investors away from investing. Ironically, this keeps the bear market alive because no few buyers are purchasing investments, the selling continues. A bear market will cause the securities you already own to drop in price but would keep you at a loss if you plan on selling or you need your money immediately. Falling stock prices and depressed markets are the friend of the long-term, value investors.
If you are a long term investor, a bear market is a great oppurtunity to buy as prices of stocks are undervalued. To invest in a bearish market, research for companies that are stable and that are going to be around for several years into the future. A stable company is one that provides goods and services that are always going to be needed. Note that even the best selling stock can dip for a while, but over the long term will become stable and rise again.
Another way is to diversify your porfolio, buy into stocks, bonds, debentures, annuities, cash e.t.c so that when stock prices slide, the cash or hard currency part of a portfolio will remain stable. It is also important to buy into dividend paying stocks as they act as bear protectors. When the dividends are reinvested, they purchase more shares at lower prices during a bear market.
Do you have any question concerning investment, how you can join investment club, buying shares, dividend, share certificate, stockbrokers, registrars, you want answers to? Send your questions via text to or call 08058767059. Email: amadasunese@nigerianobservernews.com. All questions will be treated comprehensively on this page.
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