What are the main reasons to be a bear? (and a bull)
Best Answer
3963 points
MNSL answered 7 months ago …
Even in this market we can become bullish if we invest in correct sectors and correct companies globally. Timing and selecting sectors will be very important in the next o5 years. For some companies always there will be demand for their products and their cost will come down drastically in the next 18 months.
Reasons to be bear:
Higher unemployment rate will exceed by more than 12% by 2011 in many countries
Commercial real estate will collapse sooner than later
Consumer purchasing power will go down dramatically
There will be depressed market for some assets, commodities and currencies until 2015.
More and more baby boomers will retire in the next 10 years
Banking, fund management, credit market and derivative mess
As a result of this, sectors such as tech, telecom and software, electronic, auto, airlines, leather and other luxury items will perform badly.
Reasons to be bull:
Lower interest rate
Lower oil and other commodity prices
Demographic changes will create demand for some sectors
We will have more and more sector oriented bull market in the next decade
We will have more and more volatility in the all types of market in the next decade.
We will have more and more panic selling in the next decade
We will have short term bubble and burst in currencies and commodities in the next 05 years.
Answers
195 points
Informer answered 7 months ago …
Well right now the main reason to be a Bear are (in my opinion):
1. Mortgage resets are set to hit us again in 2010 - everyone thinks the mortgage mess is over but just wait until that happens.
2. The unemployment picture is continuing to deteriorate. When people can't work they can't buy products which forces companies to cut even more jobs and it turns into a vicious cycle.
3. The government isn't doing enough to put money in people's pockets short term. They're doing a lot of bank bailouts but not enough for the american consumer - 70% of our GDP comes from consumer spending...TAKE CARE OF THE CONSUMER!
