When you are investing in the bear market you have to think very long term, Know the type of strategy selected, and choose the correct stock to purchase. A bear market is also known as bull market is where the Stock Market is weak and the trader be expecting the price of stocks will fall. In other words, the best trading amount is usually lower as prices drop in during this weak market phase, however, it is still possible to make more money in a bear market.
How to choose stocks in a bear market? Choosing successful stocks that will perform over the very long-term needs a hard research concerning that particular stock. An intelligent investor will always do a ratio analysis and assess the financial position and operating results for a prospective company. In most cases a single ratio does not usually provide enough information to judge the overall performance of the company. It should be compared with a few sort of standards, for example, comparing a firm’s ratio to others in the similar industry, or to the industry average.
A few of the most well-liked ratios used in the choice of stocks are EPS (earnings per share), and P/E (price/earnings) ratio. A lot of investors use the price/earnings ratio to settle on whether a company share is quite valued, over-valued or under-valued. During bear markets, the low PE stocks with very high growth prospects choose as the great investment option.