Fortunes are Made in Bear Markets- As World Stock and Cryptocurrency Markets Tank, Keep this in Mind
The world stock markets have reacted with violent free-fall. Short-sellers are making a killing as the combined oil-price war and coronavirus effects have driven the market down further than expected. The world stock markets have lost trillions of dollars since last week, and the 5,000 point DJIA dip amid monumental short-selling is projecting a bear market. As investor sentiment sours, are we all ignoring the most salient investing advice? What has happened to buy low and sell high?
This morning, the Dow Jones Industrial Average (DJIA) fell almost 2,000 points (7%), which tripped a market circuit breaker, resulting in closure of the market for 15-minutes. Oil fell 20%, Bitcoin fell below $7,800 and Boeing fell over 10% on news of FAA non-compliance. Everything was red, and the DJIA has fallen over 5,000 points in 2020 year to date. This is a brutal time to be in the markets, and all points signal more pain to come as 10-year Treasury bonds head closer to 0% interest. These indicators are massively bearish for the world equity markets.
The cryptocurrency market lost a staggering $25 billion off its marketcap on Monday, and Bitcoin suffered a 10% loss. The cryptocurrency market selloff followed the oil and global equity selloff, and was particularly pronounced. Bitcoin was tested as "digital gold", and ultimately followed the greater market. Investors in the bearish cryptocurrency market have taken it in the shorts as well.
More fortunes have been made during bear markets than in bull markets. As the world turns upside down and blood runs in the streets, now is the time to buy excellent companies and cryptocurrencies at a deep discount. Famed investors including Warren Buffett and Carl Ichan have subscribed to this mantra, and have created their fortunes when other dumped cheap shares. As a value investor who seeks excellent companies at a discount, one should sow during a bear market and reap as the bull market begins.
A bear market is defined as a 20% decline from a 52-week high. The DJIA is approaching bear-market territory. Remember to buy low and sell high. Follow major institutional investors and buy low to later sell high.
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Originally published in my Publish0x account I own at:
Also published in my Steemit account as Cryptoedify and my Weku account under wstanley225.
Picture from Pixabay.