Primary bear market

Primary bear marketA primary bear market is the long downward movement interrupted by important rallies. It is caused by various economic ills and does not terminate until stock prices have thoroughly discounted the worst that is apt to occur.

There are three principal phases of a bear market:

The first represents the abandonment of hopes upon which stocks were purchased at inflated prices;

The second reflects selling due to decreased business and earnings;

The third is caused by distress selling of sound securities, regardless of their value, by those who must find a cash market for at least a portion of their assets.

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Igor Marinkovic

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