BULL & BEAR Markets: Everything you need to Know
What is a Bull market?
A bull market is one in which, over a period of months or years, stock prices are predicted to continue to rise or rise.
The term bull market is commonly used to refer to the stock market. It can be used for everything like securities, real estate, currencies and other commercial items. A bull market example The Sensex rose more than 98% in the Indian stock market between December 2011 and March 2015.
In the financial world, the bull market is used to describe the economic environment of a country that is growing and optimistic. While there is no specific way to identify a bull market, this means that all types of financial instruments such as stocks, securities, and real estate will rise in the long run.
Key Indicators of a Bull Market:
The three main indicators of the bull market are:
1. The country’s GDP is increasing:
If a country’s GDP is higher than in the past, it means that consumer spending is higher and this is a general indicator of a growing economy.
2. Rise in stock prices:
As stock prices rise, more and more people believe that the market will continue to rise in the future and that most key indices will rise accordingly.
3. The employment rate in the country is increasing:
Growth in the economy refers to the growth of businesses, which means the growth of labor. More people will get jobs through the Bull market. A bull market usually offers investors a lot of lucrative opportunities because stock prices usually rise across the board. But it does not last forever and does not always announce its arrival in advance, so the investor must know when to buy and when to sell shares.
What is a beer market?
A bear market is the opposite of a Bull market. A bear market is a market that is predicted to continue to decline or decline, depending on the forecast for several months or years. The most recent example from the Indian stock market is the period from March 2015 to February 2016, where the Sensex fell more than 23%.
It describes a stagnant or downward trend in the economy. People’s confidence in the economy is low, and more people are selling shares than they are buying. Moreover, a bear market is a good indicator of a recession, i.e. a period of long-term negative growth.
Key Indicators of a Beer Market:
1. Unemployment rate is high:
High unemployment rates are usually a sign of a bear market. When the economy collapses, companies lose their business, leading to layoffs.
2. Fall in stock prices:
As stock prices begin to fall, fewer people are willing to buy shares. As a result, stock prices fall further and the market falls.
A beer market is another economic cycle in which investors must live.
Although a beer market may look bad, it usually does not last long. Economic problems will come, but the downturn in the stock markets has proven time and again.
In a bear market, it would be wise to adjust the portfolio composition by investing heavily in safe investment instruments that provide stable returns such as bonds and debt-based mutual funds. This can be considered even if the income is moderate or not low.
Bull vs Bear Market – Differences:
The most commonly used terms in the stock market are ‘Bull’ and ‘Bear’. These words came into use from the way these animals attack their enemies.
A Bull blows its horns in the air, while a bear swipes its paws downwards when attacking enemies.
So these actions are metaphors for the movement of the stock market. If the market trend is upwards, it is a bull market and if the market trend is downwards it is also said to be a bear market.
