Bear markets can be a terrible financial crisis it is true. But most people preach the end is near when we have hit a bottom. So, how do you really know when a bear market is coming?
Well here are a few of the things to look out for and are good signals that a bear market might be coming.
The first is inflated prices. Have stocks been going up for months or years without any rationality? Are they simply too expensive to represent the companies they are backing? This would be a sign that a bear market is coming.
Another sign is cockiness. Are the majority of financial experts cocky and thinking that stocks will sour forever and that bear markets are a thing of the past? This is another sign.
Finally how many bad loans are going out? One of the major causes of the great depression or other major financial crisis events was that banks gave out a lot of bad loans with nothing solid to justify them.
Now you know the warning signs, so keep them in mind the next time you hear the world is ending.