Bull Market vs. Bear Market? What You Need to Know
The stock market can seem like a game of chance sometimes — you might wake up one day to find that your investments have grown by 5% overnight, then six months down the line, there was an unexpected crash, and you’ve lost all your gains (and then some)
But what if I told you that this so-called “randomness” is actually a well-studied lifecycle that we can predict and account for in our trading decisions?
If you’ve been around for long enough, you can’t have failed to notice that the economy goes through booms and busts, and these are known as bull markets and bear markets for our investments.
The two names might sound similar, but trust me, the two phenomena are worlds apart. Let’s take a look at what bear and bull markets are, what to expect from them, and how to react to them for maximum profit.
What Is a Bull Market?
If I had to sum up the sentiment of a bull market in five words, it would be these: let the good times roll. During a bull market, everything looks peachy — the economy is doing great, stock prices are high, and unemployment is low. What more could you ask for?
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