Basics Intermediate: Understanding Bull and Bear Markets

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1.
If you believe in "buying low and selling high," at which of the following points should you sell your stock?
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When the stock begins to move downward. This signals that the bull market may be reversing, although it is never certain. This signal is not present during the other situations mentioned, because they may just be periods of slow growth.
2.
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.
3.
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.
4.
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.
5.
What was the longest bear market in the United States?
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The Great Depression. By far, this was the longest bear market.