No Comments

What is Bull and Bear Market

In the stock market gabssaldi diegodallapalmaoutlet ovyescarpe negozigeox ynotoutlet kleankanteenkinder jersey mls jersey mls akuschuhe blaineharmont coralbluescarpe marellasaldi cainsmooredonna andcamiciesaldi donkeyluckycatwe use these 2 words very frequently, ever wondered what is Bull and Bear, Consider reading this article to find more information.

Bull and Bear are the terms used to refer to the direction of the trend of the market, i.e. whether the value is appreciating or depreciating, for every investor the major force to determine on investment will be based on the direction, this direction is indicated as bull or bear.

Bull Market:

Consumer confidence will impact greatly any asset class (Stocks, Commodities, Currencies, Bonds, Crypto-currency, etc.), here in Bull Market the price tends to appreciate for a sustained period which will build confidence in buying, followed by increased economic activity, Rupee appreciation, lower unemployment, controlled inflation, stable growth- all these factors will influence larger interest in the market for buyers, that will trigger or create a bullish market. The bull market is filled with optimism.

Recently post-pandemic we have witnessed a bull market for a continuous period of a year and a half across all the stock exchanges.

Bear Market:

A bear market occurs when the price falls significantly for a sustained period of time. They are opposite to the bull market. Bears are strengthened by the economic slowdown, increased unemployment, higher inflation, rupee depreciation. Instead of buying investors tend to sell their holdings and run towards safe deposits like Bank FD. This signifies the seller’s market. Bears can take control of the market for a longer duration.

Pandemic has shown us a picture of a bear market recently.

Important characteristics of bull and bear market are:

Supply and Demand of shares:

In a bull market, there is strong demand and a weak supply for shares. In other words, many investors wish to buy shares but few are willing to sell them. As a result, share prices will rise as investors compete to obtain available equity.

In a bear market, the opposite is true: more people are looking to sell than buy. The demand is significantly lower than supply and, as a result, share prices drop.

Investor mindset:

Investor psychology and sentiment affect whether the market will rise or fall. Stock market performance and investor psychology are mutually dependent. In a bull market, investors participate in the hope of gaining a profit.

During a bear market, market sentiment is negative; investors begin to shift their money out of equities and into fixed-income securities like bank FDs.

Economic Activity:

A bull market is associated with a strong economy and increased economic activity and a Bear market is associated with a weak economy and slowdown in economic activity.

In the Bull market, people are willing to spend more as compared to the bear market.

Closing Thoughts:

During the bull market, any losses should be minor and temporary; an investor can typically actively and confidently invest in more equity with a higher probability of making a return.

In a bear market, however, the chance of losses is greater because prices are continually losing value, and looks like there is no end to the fall. 

You might also like

More Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

Menu