It is important to be familiar with the terminology used before investing in the stock market. Stock market experts and news media have been repeating the bull-bear mantra over and over again. Many people would have seen the fiery Bull statue at Bombay Stock Exchange (BSE), or the iconic Charging Bull statue at New York. Did you know that bull and bear are important in the share market? This article will discuss the differences between bear and bull markets.
We all know that share market volatility is a fact. This means that they can fluctuate due to a variety of economic factors. They can move up or down depending on economic and political factors. The market sentiment is represented by bull and bear. Let's first understand the bull vs. bear definition. Simply put, bull refers to when markets move up and bear refers to when they are moving down. These two animals are called bear market and bull market.
Which one are you choosing? When it is attacking, a bull raises its head higher than a bear while attacking. Bull markets are positive, optimistic and reflect investors' confidence in their market. Many people believe that prices will rise. When the economy is strong, markets can go into a bull phase. Bull markets are when all stocks see a rise in prices. This is because people become more bullish on all stocks. The bull market will continue to grow, which is likely to lead to greed in the stock market. Investors tend to buy more shares if they are confident in their performance.
When unemployment rises and the economy slows down, a bear market is usually observed. Investors feel fear and sell their stocks to protect themselves from falling stock prices. Markets associate a bear market with a recession. In a bear market, stocks prices continue to fall. Many view bear market as an opportunity for quality stocks to be purchased at low prices, and then sold at higher prices when the market trends turn up. Investors can panic when they see a bear market, but this is unnecessary. Markets are cyclical and will fall after a period of time.
Investors have a variety of strategies to capitalize on the market opportunities. Bull spread is what traders use when they are bullish on a stock. They try to make a profit if the stock price rises as expected. Bear spread is when traders are negative about a stock. They expect the stock's price to fall. This article will help you understand the differences between bull market and bear market. Investors don't need to worry about when they should enter the stock market, whether it is bull or bear. As markets are not time-sensitive, it is best to start your investment journey at any time. So don't hesitate. Get your trading and demat account opened today!