It's hard to predict the market after its recent roller coaster ride.
On Wednesday, May 4, the US stock market surged as investors looked at the expected and more pronounced interest rate policy, and those gains were erased by hawkish voices from some Fed officials late Thursday, May 5.
Is the bear market near its bottom?
Some investors got caught up in dumping all their holdings, while others stuck to their dip-buying strategy. Being a risk-taker or risk-averse investor is a personal appetite that will cause market divergence and volatility.
"We're finally getting to that point where everything is for sale, regardless of the quality of earnings. And that typically is what happens toward the end of a selloff, not the beginning," said Art Hogan, chief market strategist at National Securities.
"When you see this type of broad-based selling across every single sector, asset class, crypto, the future of technology, the quality darlings, that tells me that we are likely closer to a bottom than we are to an additional major correction," said Sylvia Jablonski, co-founder of Defiance ETFs according to an article published by Bloomberg.
How to find potential opportunities in a bear market
A rising market underlies risks, while a falling market brings opportunities. Every stock market crash could signal a potential entry opportunity, whether it's a panic selling at the end of a bear market or a sharp pullback amid a bull market.
When panic prevails and stock prices fall precipitously, savvy investors attempt to benefit from the rebound via lapping up quality stocks.
What kinds of stocks are considered quality?
Generally speaking, good stocks include but are not limited to three types.
Growth companies in fast-growing industries
Cash cows in steady industries
Highly prosperous companies in cyclical industries
Learn how do you pick them out?
See our latest course for more details: How to find investment opportunities amid bear markets
Stock picking from sectors/industries is a classic top-down approach. When researching a specific stock, you need to evaluate a company with the help of indicators and metrics.
You might like: Indicators to evaluate the financial success of a company
Plus, if you don't have a specific idea of what stocks to buy, moomoo has the right tools to help you.
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