We are currently in a crisis, the Corona pandemic has caused governments to enforce a lockdown, and the market has crashed already. Then why is it going up again as we are (most likely) headed into a bear market cycle?
This phenomenon is called bear market rally. It occurred during every bear market since the beginning of the 20th century. It’s a period inside of a bear market in which prices of stocks temporarily increase before returning to new lows.
Currently all the major indexes are up 20-30% again. So there has been quite some opportunity to generate some short term gains despite that we are long term oriented in our investment strategy.
The long term oriented investment strategy doesn’t necessarily mean that we should never take short term profits. But beware: We are not at all about speculating!
As you keep accumulating your investments through dollar cost averaging there may be chances where recent purchases quickly increase in their value. So by all means take advantage of such an opportunity and take profit.
Again, it’s not about speculating or timing the market as that’s nearly impossible, especially for average investors. But have an eye on the markets these days ;)
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How to make money during a bear market rally. Curious how? Check out today's video, and join in now you still can.
Posted by Lukas Xu on Tuesday, 14 April 2020