The stock market, also known as the secondary market or secondary market, is a place where stocks are issued and circulated. It can also be said to refer to a place where issued stocks are bought, sold and transferred. Stocks are traded through the stock market. Generally speaking, the stock market can be divided into primary and secondary markets. The primary market is also called the stock issuance market, and the secondary market is also called the stock trading market. \x0d\\x0d\We have already said that a stock is a marketable security. In addition to stocks, marketable securities also include national bonds, corporate bonds, real estate mortgage bonds, etc. National bonds appeared earlier and were the first marketable bonds to be put into trading. With the development of the commodity economy, stocks and other marketable bonds gradually appeared. Therefore, stock trading is only a component of bond trading, and the stock market is only one of a variety of bond markets. At present, there is rarely a single stock market. The stock market is nothing more than a place specializing in stocks in the securities market. \x0d\\x0d\The stock market is one of the main ways for listed companies to raise funds. With the development of the commodity economy, the scale of companies is getting larger and larger, requiring a large amount of long-term capital. However, it is difficult to meet the needs of production development by relying solely on the company's own capital accumulation, so funds must be raised from outside. There are generally three ways for companies to raise long-term capital: first, borrowing from banks; second, issuing corporate bonds; and third, issuing stocks. The first two methods have higher interest rates and are time-limited, which not only increases the company's operating costs, but also makes it difficult to stabilize the company's capital, so it has great limitations. When raising funds by issuing stocks, there is no need to repay principal and interest, and only a portion of the profits is allocated to pay dividends. Comprehensive comparison of these three financing methods, the method of issuing shares is undoubtedly the most economical principle and the most beneficial to the company. Therefore, issuing stocks to raise capital has become an important form of developing the economy of large enterprises, and stock trading therefore occupies a very important position in the entire securities trading. \x0d\\x0d\The changes in the stock market are closely related to the development of the entire market economy. The stock market has always played a role as a barometer of economic conditions in the market economy. \x0d\The so-called "bull market", also known as the bull market, refers to a generally bullish market that lasts for a long time. The so-called "bear market", also known as the short market, refers to a generally bearish market that lasts for a relatively long period of time. \x0d\\x0d\Based on the empirical data of the U.S. stock market, Dow Jones summarized the different market characteristics of the bull market and the bear market, and believed that the bull market and the bear market can be divided into three different periods. \x0d\The first phase of the bull market. Coinciding with part of the third phase of the bear market, it often occurs when the market is at its most pessimistic. Most investors were disillusioned with the market and were indifferent even when there was good news in the market. Many people began to sell all their stocks regardless of the cost. Far-sighted investors anticipate that market conditions are about to change by analyzing various economic indicators and situations, and begin to gradually choose high-quality stocks to buy. Market transactions gradually rebounded slightly. After a period of time, many stocks have flowed from the hands of blind sellers to the hands of rational investors. The market occasionally falls back during the recovery process, but the low point of each fall is higher than the previous one, thus attracting new investors to enter the market, and the entire market becomes active. At this time, the operating conditions and company performance of listed companies began to improve, and the increase in profits attracted the attention of investors, further stimulating people's interest in entering the market. \x0d\The second phase of the bull market. Although the market situation improved significantly at this time, the sharp decline in the bear market left investors with lingering fears. The market is in a stalemate of neither rising nor falling, but overall the tone of the market is good and stock prices are trying to rise. This period can last several months or even more than a year, depending on the severity of the psychological damage caused by the last bear market. \x0d\The third phase of the bull market. After a period of hesitation, the stock market trading volume continues to increase, and more and more investors enter the market. Every time the market falls, it will not cause investors to exit the market, but will attract more investors to join. Market sentiment is high and full of optimism. In addition, good news about the company is also constantly coming out, such as profit doubling, acquisitions and mergers, etc. Listed companies also took the opportunity to raise funds on a large scale, either giving out bonus shares or splitting their shares into subdivisions to attract small and medium-sized investors. At the end of this stage, the market is extremely speculative, and even bad news will be hyped as a hot spot for speculation and turned into good news. The share prices of junk stocks and unpopular stocks have all risen sharply, while some stable and high-quality stocks have been ignored. At the same time, the craze for stock trading swept across all corners of society, with all walks of life, men, women, old and young joining the army of stock trading. When this situation reaches a certain extreme, the market will turn. \x0d\The first period of the bear market. The initial period is the end of the third period of the bull market, which often occurs when the market investment atmosphere is at its highest. At this time, the market is absolutely optimistic and investors are completely unwary of changes in the market outlook. All kinds of good news, true and false, are everywhere in the market, and the company's performance and profits have reached abnormal peaks. Many companies accelerated their expansion during this period, and news of mergers and acquisitions spread frequently. While the vast majority of investors are crazy about the rise in the stock market, a small number of wise investors and individual large investors have begun to gradually withdraw their funds or stay on the sidelines. Therefore, although market trading is very hot, there are signs of cooling down. At this time, if the stock price rises further but the trading volume cannot keep up, a sharp drop may occur.

During this period, when the stock price fell, many people still believed that the decline was just a correction in the upward process. In fact, this was the beginning of the stock market crash. \x0d\The second phase of the bear market. At this stage, any disturbance in the stock market will trigger "panic selling." On the one hand, there are too many hot spots in the market, and people who want to buy are holding back because it is difficult to choose, and are on the sidelines. On the other hand, more people began to rush to sell, exacerbating the rapid decline in stock prices. In markets that allow credit trading, speculators who engage in short-selling transactions suffer a greater blow. They are often forced to sell due to the pressure of repaying the borrowed funds, so the stock price falls more and more rapidly, and is out of control. After a round of crazy selling and a sharp drop in stock prices, investors will feel that the decline is a bit excessive, because the current situation of listed companies and the economic environment has not yet reached such a pessimistic point, so the market will experience a larger recovery and rebound. This mid-term rebound may last for several weeks or months, and the magnitude of the recovery or rebound is generally one-third to one-half of the total market decline. \x0d\The second phase of the bear market. After a period of mid-term rebound, the economic situation and the prospects of listed companies tend to deteriorate, with company performance declining and financial difficulties. Various bad news that is difficult to distinguish between true and false comes one after another, causing further damage to investor confidence. At this time, the entire stock market was filled with a pessimistic atmosphere, and the stock price fell sharply after rebounding. \x0d\In the third period of the bear market, the stock price continued to fall, but the decline did not intensify. Because those stocks with poor quality had already fallen almost in the first and second periods, the possibility of falling further was unlikely, and this At that time, due to the collapse of market confidence, the falling stocks were concentrated in blue chip stocks and high-quality stocks that had always performed well. This stage coincides with the early stage of the first stage of the bull market. Foresighted and rational investors will consider this to be the best opportunity to buy high-quality stocks at low prices. They can obtain generous returns after the market rebounds. \x0d\Generally speaking, the bear market lasts shorter than the bull market, accounting for only about one-third to one-half of the bull market. However, the specific time of each bear market is different, and there will be big differences due to differences in market and economic environments. Looking back at the period from 1993 to 1997, my country's Shanghai and Shenzhen stock exchanges experienced significant changes in stock prices, which was a complete cyclical process from bull to bear, and then from bear to bull.