MEPX
Chapter 10 of 12All chapters
  1. 1What a share is
  2. 2Exchanges and brokers
  3. 3How a price is set
  4. 4Order types
  5. 5What it costs
  6. 6Reading a company
  7. 7Dividends and returns
  8. 8Indexes and funds
  9. 9Risk and diversification
  10. 10Market cycles
  11. 11Psychology and mistakes
  12. 12Learning further

Chapter 10 of 12

Market cycles

Bulls, bears and corrections.

The vocabulary

A bull market is a sustained rise and a bear market a sustained fall, usually counted from about 20 percent. A correction is a smaller drop of around 10 percent.

  • Falls are normal and frequent. A 10 percent drop happens most years.
  • Recoveries tend to include the largest single-day gains, which is why leaving is expensive.

Nobody times it

Predicting turns consistently has defeated professionals with far better information than a private investor has. Regular investing regardless of level is the boring alternative that removes the decision.