Basics Intermediate: Understanding Bull and Bear Markets

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1.
Emotions can contribute to bull and bear markets.
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True. Aspects of investor psychology, such as emotions, can drive people to value stocks very high or very low.
2.
What does the advance-decline line use to forecast market trends?
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A net advance. This figure measures the difference between the number of stocks advancing in price and the number declining in price.
3.
Economists and market-watchers use a practice called _______ to help them predict stock values.
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Technical analysis. This is the use of market data to analyze individual stocks and the market as a whole.
4.
Bull market investors seek _______ more than anything.
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Growth. Bull markets are about rising prices, and rising prices are what growth is about. Therefore, income and dividends are secondary.
5.
Why do bonds perform well during bear markets?
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Their returns stay the same. Bond returns are fixed no matter what the market. They can't rise or fall.