The stock market gains of 2009 are quickly dissipating. Stocks are down for the third straight day in a row and investors are selling in a mad frenzy. Some analysts think this could be the end for the bulls and that a bear market is on the horizon.
No doubt, the stock market has taken a severe beating in the past two years. The year 2008 was the year of financial disaster and 2009 proved to be a cautious attempt to gain back what was lost in 2008. However, with the recession still looming and job loss ever-present investors are shaky and reticent to invest for the long term.
Many analysts are sounding the bell for the rise of a bear market as well. Satyajit Das, a well known expert on credit derivatives warns that the market is going to experience even more loss. Furthermore, he posits that the credit crisis of America is just now reaching the rest of world.
Debt still embedded in the world economy, according to Das, is about to make rear its ugly head in a big way. This, like in the US is the result of too much liquidity and credit bandied about like candy. Furthermore, the crisis is not simply a product of silly homeowners getting in over their heads. Das thinks that banks, hedge funds and financial regulators were complicit in the free pour money lending. It was a way to generate more collateral with flat interest rates.
Still others believe the bear market is simply a correction of a market that grew too much too fast. Guy Adami of the TV program Fast Money, believes that investors are realizing that the market is over-inflated. Sells are happening non-stop despite good earnings news and other relatively optimistic news.
Investors ought should be aware of the financial news and be aware of the risks that investing in the stock market has. For the untrained investor, stocks are a gamble and are highly volatile. Should a bear market turn up, investor should take appropriate measures with their money.
Written by Lani Shadduck
HULIQ.com
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