Bull Market

 ABOUT BULL MARKET

A bull market is a financial market condition in which prices are rising or are expected to rise. The term "bull market" is most associated with the stock market, but it can be applied to any traded asset, including bonds, real estate, currencies, and commodities.

 

Understanding Bull Markets

 

Bull markets are characterized by optimism, investor confidence, and expectations that strong results will last for a long time. It is difficult to predict when market trends will change on a consistent basis. Part of the problem is that psychological effects and speculation can sometimes play a significant role in market behavior. There is no single, universal metric for identifying a bull market. Nonetheless, the most common definition of a bull market is a rise in stock prices of 20% or more from recent lows.

 

 Because bull markets are difficult to predict, analysts usually only notice this phenomenon after it has occurred. The period between 2003 and 2007 was a notable bull market in recent history. During this period, the Sample 500 increased by a significant margin following a previous decline; however, as the 2008 financial crisis took effect, major declines occurred again following the bull market run.

Bull Market Characteristics

Bull markets typically occur when the economy is strengthening or is already strong. They usually occur in conjunction with a strong gross domestic product (GDP) and a drop in unemployment, and they frequently coincide with an increase in corporate profits. During a bull market, investor confidence will typically rise. The overall demand for stocks will be positive, as will the overall market tone. Furthermore, during bull markets, there will be a general increase in the amount of IPO activity.

 

Markets: Bull vs. Bear

A bear market is the inverse of a bull market, characterized by falling prices and typically shrouded in pessimism. According to popular belief, the use of the terms "bull" and "bear" to describe markets stems from the way the animals attack their opponents. A bull raises its horns into the air, while a bear lowers its paws. These actions are metaphors for market movement. A bull market exists when the trend is upward. A bear market exists when the trend is downward.

                                                                                                                                                                                                                                                          

                                                                                                                                                                      The Benefits of a Bull Market

Investors who want to profit from a bull market should buy early to capitalize on rising prices and sell when they reach their peak. Although it is difficult to predict when the bottom and peak will occur, most losses will be minor and temporary. Several prominent strategies used by investors during bull market periods are discussed below. However, because it is difficult to assess the current state of the market, these strategies also involve some degree of risk.                      

 

 

                                                                                                          Submitted  by

                                                                                                   Sk. Mohamad Mujammil

                                                                                                                     TPS-A

                                                                                                                     30-005