There are two classic market types used to
characterize general direction of market. Bull markets are
when market is generally rising, typically result of
strong economy. A bull market is typified by
generally rising stock prices, high economic growth, & strong
investor confidence in economy. Bear markets
are opposite. A bear market is typified by falling stock prices,
bad economic news, & low investor confidence in economy.
A bull market
is financial market where prices of instruments [e.g., stockss]
are, on average, trending higher. The bull market tends
to be associated with rising investor confidence &
expectations of further capital gains.
A market in which prices are rising.
A market participant who believes prices will move higher is called a
"bull". A news item is considered bullish if
it is expected to result in higher prices.An advancing trend in stock
prices that usually occurs for time period of months or years.
Bull markets are generally characterized by high
trading volume.
Simply put, bull markets
are movements in stock market in which prices are rising &
consensus is that prices will continue moving upward. During this time,
economic production is high, jobs are plentiful & inflation is low.
Bear markets are opposite--stock prices are
falling, & view is that they'll continue falling. The economy
will slow down, coupled with rise in unemployment & inflation.
A key to successful investing
during bull market is to take advantage of rising
prices. For most, this means buying securities early,
watching them rise in value & then selling them when they reach
high. However, as simple as it sounds, this practice involves timing
market. Since no one knows exactly when market will begin its climb
or reach its peak, virtually no one can time market perfectly.
Investors often attempt to buy securities as they demonstrate strong
and steady rise & sell them as market begins strong move
downward.
Portfolios with larger percentages of
stocks can work well when market is moving upward. Investors who
believe in watching market will buy & sell accordingly to change
their portfolios.Speculators & risk-takers can fare relatively well in
bull markets. They believe they can make profits from rising prices, so
they buy stocks, options, futures & currencies they believe will gain
value. Growth is what most bull investors seek.
What
is Bear Market?
The opposite of bull market is bear market when
prices are falling in financial market for prolonged period of time.
A bear market tends to be accompanied by widespread pessimism.A bear
market is slang for when stock prices have decreased for an extended
period of time. If an investor is "bearish" they're referred to as
bear because they believe particular company, industry, sector, or
market in general is going to go down.
