Understanding What Is Bull Market & Bear Market

Though you not being in stock market, you might have heard the terms bull and bear market. These terms are aliens to anyone who has nothing to do with stock market, but they are primary trend that describes the trend of the stock market and usually lasts for more than a year or so.

Bull market describes an upward trend in the stock market that in turn leads in rising values of stocks. It is the time wherein investors’ gains more confidence. The trend is usually high volume buying trend where traders expects their shares and stocks to be more valuable in coming future. What actually happens is, there is large group of investors moving together to buy these stocks and this group is majorly referred as herd.

Obviously, the bear market is opposite of the bull market which shows the downward trend. It usually happens when overall economy is suffering and showing downward swing. The trading interest amongst investors is also slowed down. Traders, investors and others businesses who are dealing in stock market show less interest in investing their money. Also; those who have done some mega investing fear about the steep downfall in their investments incurring them major loss.

Price of shares and other stocks and bonds may remain at the same level, but that is the stagnant phase that refuses to move easily. There is one good example to set for the bear market and that is Great Depression in the year 1929, however not all the phase of the stock market experiences these kind of downfall.

The stock market trading can be lucrative either in bear market or bull market depending on the investments you have made in the market. A smart investor knows how to pull out the profits utilizing the phase that has arrived in the market. It is a natural process and it happen lot of times; where most of the investors make sure to understand the market timing and minutely examines the trend before making any investments.

You need to study carefully and closely about these trends. Especially if you are a newcomer it is important that you bid under somebody’s guidance. Also; there is much software available to help you get through with your initial start. Invest only when the timings are right. To win and loss is the parts of the stock market so do not be over emotional when things are not showing favourable signs. Just wait and watch for some more time until your time comes. J

 

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