Bear and Bull Market provide an opportunity to invest in cyclical and defensive stocks. From a fundamental analysis perspective, investors should create a portfolio mix of both cyclical and defensive stocks. During a bull market, the weightage of cyclical stocks should be high. Whereas, during a bear market, an investor should reduce exposure to cyclical stocks and increase the weightage of defensive stocks.

Cyclical Stocks are the one that moves in tandem with the economy or economic trends. The deliver high return during the period of high economic growth. Whereas during sluggish economy their returns are muted. These are preferred during the bull run and are normally high beta stocks. Some of the examples are an automobile, consumer goods, and hospitality sector.

Defensive stocks are basically independent of the economic cycle. These comprise of stocks of the companies that fulfill basic needs of their consumer thus demand is unaffected. These are low beta stocks and examples are FMCG, Pharma, Insurance etc.

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As with all things in life. There are peaks. That includes a peak in the stock market, cryptocurrency Market, corporate growth, your physical fitness. Understanding that these things exist, doesnt take away from the pain, but it makes it easier to make the best of the circumstances. In the case of crypto investing, you can hope for the bull but should also be prepared for the bear. In developing this mindset, you can make the best out of the market circumstances.
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