In stock trading and investing there are bulls and bears. You often hear of the market being bullish or bearish. So what is the definition of a bull market and what is a bear market? A Bull Market This is when the market is showing confidence. Number of shares traded is also high and even the number of companies entering the stock market show that the market is confident. These are bullish characteristics. If there is a run of bullish days then you may hear the market is a bull market.
A Bear Market A bear market is the opposite to a bull. A bear market is a market showing a lack of confidence. Prices hover at the same price then go down, indices fall too and volumes are stagnant. In a bear market people are waiting for the bulls to start driving the prices up again. However, a bear is a very tentative bull or a bull that is asleep. Market Timing Some people believe that by recognizing the different kinds of markets you can make money on stock trading and investing.
The basic idea behind buying stocks is to buy low and sell high. This will give you a profit. So to make money you buy stocks in a bear market when stock prices are low and sell stocks in a bull market when stock prices are high. However, knowing when is the best time to buy and sell is not that simple. You can make some money that way but it also explains why many investors lose money by trying to time the market.
The safest way to help prevent yourself from making these mistakes is to buy stocks and invest in the market by regularly making fixed size investments, and holding your investments for a long period of time.
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This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor. Hey thanks for writing up the differences on bull and bear markets, I really think free stock tips like this really help new investors like myself see the bigger picture.
Keep up the good work! Bull and bear markets trends are good indicators to buy or sell the stock it is advised to buy at the entrance of a bull market not in the bear market because you dont know when the bear period ends. Moreover there is an amazing situation between bull and bear when the bear turns to bull as sometimes it is not the launch of a bull, it is a weak rally and the bear continues its down track so we should be patient in the transition period between bull and bear.
Your email address will not be published. What is a Bull and a Bear Market? For teaching and learning about investing: Stocks are shares in a company. Investing in Bonds A bond is a debt security, by which you are lending money to a government, The Benefits of Index Funds The toughest part of investing in stocks for most people is stock selection. Leave a Reply Cancel reply Your email address will not be published.
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