The terminology Bull market and bear markets are generally used to describe the direction of the market either up or down. Stock prices up and down both during a trading day, and from one day to the next. But terms such as bull and bear describe the trend over the long term. Many analysts use a minimum analysis period of two years to determine if a change is a trend or just a change. They also feel the market needs to move at least 20%.
A Bull Market is one where the overall stock market in rising in value. The swing to a rising market occurs after it has fallen a long way and things were looking rather negative. Take a look at gold stock picks for example. When the bull market comes after such a period investors feel they can make money.
A bear market on the other hand is a trend in a downward direction. The entire market goes down, not just an individual stock.
One of the most memorable bear markets in recent history followed the stock market crash of 1929. In the three years that followed nearly 90% of stock values were wiped out. But obviously things did improve.
There is a recognised pattern to bear markets that a large initial decline is followed by a short term temporary correction in prices. Many investors trade at this time an are burnt when the next wave happens and there is a sustained decrease in stock prices.
But after bear market comes a bull market. In a bull market there tends to be higher levels of trading. The key to making money is to buy a stock at lower price and sell it as it rises. But no one has a crystal ball and doing so is easier said than done.
Many investors forget markets are cyclical. It is possible to make money in both bull markets and bear markets but to do so requires some understanding of what sort of market you are investing in.
A Bull Market is one where the overall stock market in rising in value. The swing to a rising market occurs after it has fallen a long way and things were looking rather negative. Take a look at gold stock picks for example. When the bull market comes after such a period investors feel they can make money.
A bear market on the other hand is a trend in a downward direction. The entire market goes down, not just an individual stock.
One of the most memorable bear markets in recent history followed the stock market crash of 1929. In the three years that followed nearly 90% of stock values were wiped out. But obviously things did improve.
There is a recognised pattern to bear markets that a large initial decline is followed by a short term temporary correction in prices. Many investors trade at this time an are burnt when the next wave happens and there is a sustained decrease in stock prices.
But after bear market comes a bull market. In a bull market there tends to be higher levels of trading. The key to making money is to buy a stock at lower price and sell it as it rises. But no one has a crystal ball and doing so is easier said than done.
Many investors forget markets are cyclical. It is possible to make money in both bull markets and bear markets but to do so requires some understanding of what sort of market you are investing in.
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