Bear Market Trap

A bear market trap is a phenomenon in which the market moves up over a short period of time but is really in a long-term downtrend. The move up “tricks” the investing public into believing that there is a new bull market under way; the reality shortly sets in as the market resumes its decline. Some consider a bear market trap to be a rally of 10%–20%, followed by a resumption of the overall downtrend. It is important for investors to ensure that they aren’t invested too heavily during a bear market trap, since the ensuing fall will decrease the value of their portfolio.


Sure, you can listen to the analysts and economists who tell us the U.S. housing market is getting better. But you can’t fight the reality of the numbers… The U.S. S&P/Case-Shiller Home Price Index dropped four percent in the fourth…

Market professionals around the world have been closely tracking developments in Europe and watching how the euro currency is behaving. Since May 2011, the euro has declined around 9.4% against the U.S. dollar. This weakness occurred due to certain events…

Cracks in the lining? Unexpectedly, China increased its bank rate Tuesday for the fourth time since October 2010. The rate increase was undoubtedly done in an effort to cool inflation. In China, one-year deposits rates are 3.25%. In the U.S.,…

— "Profit Confidential" Column, by Michael Lombardi, CFP, MBA I guess they were wrong again. What I'm talking about is all that positive news we heard last month about the U.S. real estate market getting better. There was a little…

The floodgates of help from the government continue to open in the United States. It's now believed that Congress wants to use the remaining $350 billion of the $700-billion Troubled Asset Relief Program ("TARP") to reduce interest rates on consumer…