Have you missed the bull run in the stock market?

What if someone told you back in 1996 that stocks would fall drastically the coming year? What if he told you that stocks would recover in 2003 and from then on continue moving up?

Will you believe him if he says this uptrend will extend until 2009? What year, then, would you be aggressively buying stocks? What year would you sell?

Sounds out of this world, but some believe the method to this, err, magic is a well known tool called technical analysis. Technical analysts like to believe that charts can tell, for example, when bulls or bears will rule the market.

A bull run simply means the market is stable, the economy is the pink of health and thus companies are earning more. It’s the kind of period when even monkeys can make money in the stock market.

The only thing you need to remember about bulls and bears are that they are antonyms; yin and yang. The common sentiment is money can be made in both markets, but a bear market separates the boys from the men.

The fantastic return of the Phisix last year made more people believe we are having a bull run in the markets. Before that year, it sounded more like a Malacañang gimmick. This time around, more people are taking notice.

The common question then is, if you haven’t invested yet, have you missed the bull run?

Elizabeth Sanchez-Lacson’s story published in Philippine Daily Inquirer today says, “No, its not yet too late.” Experts say the bull run is expected to stretch to 2009. (Read the article here)

Association of Securities Analysts of the Philippines (ASAP) president Francisco Liboro said there are still profits to be made. Stocks are not yet overpriced, and the economic outlook still looks good, explained Karen Roa, president and CEO of Philam Asset Management Inc. (PAMI). Although Roa has a self-confessed fondness for fundamental analysis over technical, she said charts did indicate that the economy has been moving in six to 10-year cycles.

Is this something that’s cast in stone? Definitely not. The other thing about bulls and bears is that the more people believe there’s a bull market, the more it becomes a self-fulfilling prophecy. Same with bears. The four letter word that describes this is…hype.

However, knowing bears and bulls is important because you can never get rid of them. They are a fact of investing life. Use your knowledge of bear and bull periods to measure a fund manager’s performance if you’re thinking of putting your money in a mutual fund or unit investment trust fund. Your understanding can also help analyze which sectors can survive such market turning points.

For example, Liboro said banks and real estate companies could survive an expected turning point in 2009. Banks do well even when the economy is down while the real estate property will continue to benefit from surges in OFW money.

There’s a cute saying in investing: “Bulls make money, bears make money, but pigs get slaughtered!” Pigs are high-risk investors who buy on hot tips without due diligence.

Now, what type of investor would you like to be?

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