Knowing A Bull Market

By Mike Swanson

Bear market or bull market are terms often used in conjunction with financial markets. They describe the general trend of a market. Individual shares may go up or down during a day or even over a period of time, but the entire market also follows patterns. Many analysts have rules around what period they make market analysis over and the percentage rise or fall they consider indicates a market movement.

The term bull market is when the stock market is increasing in price. These increases usually begin when the market is at its lowest ebb. You can see with gold stocks over the past few years. When the cycle changes and things begin improving the investing market feels there are profits to be made.

A bear market on the other hand is one where there is a constant decline in stock prices.

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.

The patterns seen in a bear market tend to be a very big initial drop in values, which pushes a lot of the speculators out of the market. This is followed by a temporary period of stock price increases before the market starts to decline again over a longer period.

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.

For many people the idea that markets have cycle is forgotten. One can make money in both a bear and a bull market. - 23223

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