What is a Bull Market?
January 25, 2016
A bull market is the opposite of a bear market. What is a bull market then? A bull market is one that is trending upwards. Investors have high expectations and high confidence in a bull market. If you want to make the most of a bull movement, you need to know what strategies are the best to produce the best profits.
What is a Bull Market – The Origin of the Bull and Bear
The names ‘Bull’ and ‘Bear’ originate from the animal kingdom, and the way in which animals attack their opponents. For instance, a bull will thrust out its horns into the air. The bear on the other hand will thrash its paws in a downward manner. These examples from the animal kingdom are metaphors for the movements that occur in the markets of the world.
When the trends are up, then we say it’s a ‘bull’ market and when the trends are down, we say it’s a ‘bear’ market. There are different investment styles and even though bulls and bears are constantly at odds, they can actually both make money with the changing cycles in the market.
What is a Bull Market – Asset Prices on the Rise
If the economy is in a strong position, gross domestic product (GDP) is growing and people have jobs then its a bull market. Financial experts reckon that economic cycles and investor sentiment play a role in the creation of bull markets. People who are optimistic and believe that stocks will go up are said to have a ‘bullish outlook’. There is optimism in the market and investors are full of confidence and expectations that there will be strong results continuing in a bull market.
What is a Bull Market – Investor sentiment Becomes Optimistic
If you are thinking of investing in some assets, you need to be aware of all the factors and characteristics of a bull market. When companies release their reports, revealing good earning results for instance, it is characteristic of a bull market. Their earnings exceed their estimates.
Sometimes the sentiment of investments can move towards financial assets such as gold. When there is uncertainty in the markets, then gold is acknowledged as an item of great value. There always appears to be great demands for gold and hence you could say when it comes to gold, there is a gold market.
But scarcity of an asset can also turn out a bull market. So can economic optimism. This happened with the property boom that the US experienced several years back. There was plenty of consumer spending and much economic optimism. It happened to boost the markets, whether in stocks, bonds, or commodities. The bull markets were promoted during this period.
What is a Bull Market – To Everything there is a Season
Usually when you get a bull market, there will generally be an increase in investment activity. Bull markets are synonymous with moneymaking opportunities for investors because prices generally rise, increasing a lot of bullish market activity. Unfortunately, bull markets do not last forever. When they are in process though, investors will- and do make use of the opportunity to make a lot of money. Investors need to know when to buy and when to sell.
Stock will be bought at low prices and sold for more than what was paid for it. One of the best strategies to make money in the bull market would be for an investor to recognize the trends early on so that they can make some smart buys. This is done by opting to trade with a regulated broker so that the broker can maximise profits while the bull market is offering such lucrative market situations.
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All info was correct at time of publishing