Core points

The market that shows the long-term upward trend is a bull market, and the market that shows a long-term downward trend is a bear market.

There are three stages of a bull market and a bear market each. The end of a bear market is often the early stage of a bull market, and the end of a bull market is often the early stage of a bear market.

Pay attention to select the target in the bull market, do not sell easily, pay attention to the end sell signal; do not operate blindly in the bear market, you can set a stop line, pay attention to the end buy signal

The main driving forces of the three big bull markets in Hong Kong stocks: the improvement of economic fundamentals, the repair of valuations, the improvement of capital, and so on.

Detailed explanation of concept

There are so many theories about the origins of bull and bear markets that there is no way to find out the real reasons. However, cattle are often seen as a symbol of strength, while bears tend to feel clunky.

Therefore, it is not difficult to understand that over a long period of time, the market has been rising continuously, and the market in which asset prices have generally risen is called a bull market. On the contrary, for a long time, the market situation has been falling, and the market where asset prices have generally fallen is called a bear market.

But the bull market is not completely without a fall, there will be a partial correction; a bear market is not completely without a rise, there will be some rebound.

As for the "up / down how much is considered a bull / bear market", the market does not have a clear standard, many people think that this range is 20%.

Understanding bull and bear markets and knowing the risks and benefits they bring can lead to rational investment and satisfactory returns.

Different stages of the bull-bear market

Bull and bear markets can usually be divided into three stages.

At the beginning of the bull market, a few people believed that the market would get better, and these investors began to buy; in the middle of the bull market, the market continued to rise, and most investors realized that the bull market had arrived; at the end of the bull market, everyone believed that the bull market was coming and market sentiment was extremely high.

At the beginning of the bear market, a few people realized that the market would not rise all the time, and these investors began to sell; in the middle of the bear market, the market continued to fall, and most investors realized that things were getting worse; at the end of the bear market, everyone thought the situation would only get worse. market sentiment is extremely negative.

Yes, a bull market tends to come to an end when everyone thinks it is coming; when everyone thinks a bear market is coming, a bear market is often coming to an end. So the end of a bear market is often the early stage of a bull market, and the end of a bull market is often the beginning of a bear market, but sometimes there is a volatile market with an unknown direction between the two.

How to pass through bulls and bears

First, you can buy at the end of a bear market and sell at the end of a bull market. The peak of the bull market and the lowest point of the bear market are difficult to predict, but you can also earn most of the gains by roughly judging the end of the bear market and the end of the bull market.

Second, in the bull market, we should pay great attention to the choice of the target, so that we can get more benefits. After the selection, do not sell easily, so as not to miss better profit opportunities. However, we need to pay attention to the signals at the end of the bull market, such as high trading volume but the market does not move, too many newcomers have entered the market, and so on.

Third, in a bear market, if you are not professional or lack of energy, do not operate blindly. If there is a position at that time, you can set a stop line and sell as soon as it is triggered. To the end of the bear market, or in the longer period of rebound, you can pay attention to the timing of entry.

The above methods are for reference only. Only by continuous study and practice can we find a suitable investment method.

Three big bull markets in Hong Kong stocks

How to tell whether it is a cow or a bear? There is no simple and unified standard, which needs to be comprehensively considered from the aspects of economic fundamentals, capital, technology, emotional aspects, and so on. Different people will have different judgments.

However, we can take a look at the three recent big bull markets in Hong Kong stocks to strengthen our perception and judgment of the bull market.

Hong Kong's economy has recovered after the Asian financial crisis. Hong Kong's GDP growth changed from negative to positive in 1999 and reached 5 per cent in 2000. The recovery of global GDP has also led to Hong Kong's exports and consumption. Led by the big bull market in US technology stocks, the valuations of Hong Kong stocks have also returned to normal. The recovery of the economy and the return of valuations led to a big bull market in Hong Kong stocks from August 1998 to March 2000, during which the Hang Seng index rose by about 175%.

From April 2003 to October 2007, Hong Kong stocks experienced another big bull market, during which the Hang Seng Index rose about 276%. The main reason for the bull market is the economic boom in Hong Kong, where per capita GDP grew by 7.1 per cent in 2005 and 6.1 per cent in 2006.

At the end of 2016, the Shenzhen-Hong Kong Stock Exchange was opened, and the capital of southbound Hong Kong stocks increased. In 2017, the prosperity of China's real estate industry rebounded sharply, and the related sectors of Hong Kong stocks accelerated. Since then, expectations of economic recovery have become stronger and stronger, and the US economy has steadily improved. In addition, the undervaluation gradually returned to normal. Stronger expectations of an economic recovery, the repair of low valuations, and more money moving south contributed to a big bull market in Hong Kong stocks from March 2016 to January 2018, during which the Hang Seng Index rose about 70 per cent.