A financial market is said to be in a bull market when prices are rising or are anticipated to rise. The word "bull market" can refer to anything that is traded, including bonds, real estate, currencies, and commodities, however it is most frequently used to describe the stock market. The term "bull market" is normally reserved for prolonged periods in which a significant share of asset prices are rising. This is because prices of securities increase and fall practically continuously throughout trading. Bull markets frequently last for several months or even years. The opposite of a bear market.
Bull-market basics
Bull markets are characterized by high levels investor confidence and belief that recent gains will persist for the foreseeable future. Market trends are hard to anticipate. Psychological impacts and speculation can affect markets.
There's no uniform bull market metric. Bull market definition: stock prices gain 20% or more from recent lows.
Bull markets are hard to foresee, therefore analysts usually only notice them afterward. 2003-2007 saw a notable bull market. During this time, the S&P 500 increased following a previous loss; when the 2008 financial crisis hit, big declines occurred again. 2021 market an astonishing 10 year-bull run, the longest bull market in U.S. history.
Bull-market traits
Bull markets occur when the economy is robust or growing. Strong GDP and a decline in unemployment generally correspond with rising business profits. Bull markets boost investor confidence. Stock demand and market tone will be bullish. Bull markets saw more IPOs.
Some of the above factors are quantitative. While business earnings and unemployment are verifiable, it might be difficult to evaluate market comments. Supply and demand for securities will be modest and strong. Few investors will be willing to sell securities. Investors are more likely to enter the (stock) market during a bull market in the hopes of making a profit.
Bulls and bears
Bear markets feature declining prices and pessimism. "Bull" and "bear" are used to describe markets because of how the animals attack their opponents, according to popular belief. Bulls raise their horns into the air, while bears swipe their paws downward. These actions symbolize market movement. Bull markets are uptrending. Bear markets are downtrending.
Bull and bear markets generally correspond with the four-phase economic cycle: accumulation, ascending, distribution, descending. Bull markets generally precede economic growth. Because public sentiment drives stock prices, the market often increases before broader economic measurements like GDP growth. Bear markets start before economic downturn. In a typical U.S. recession, the stock market falls months before GDP.
Bull Market Strategies
Investors who wish to profit from a bull market should aim at buy low when price is at a discount level, and sell high when price is overly inflated. It's hard to predict the bottom and peak, although most losses are minor and transitory. We'll discuss bull market strategies below. Because it's hard to analyze the present market, these techniques are risky.
Buy and Hold
Buying a security and holding onto it to sell later is a basic investing strategy. Why keep onto a security if you don't expect its price to rise? Bull markets' confidence fuels the buy-and-hold strategy.
Buy-and-hold increased
Increased buy-and-hold is a riskier form of buy-and-hold. The purchase-and-hold strategy assumes that investors will continue to acquire a security as its price rises. An investor may buy more shares for every pre-set increase in the stock price.
Additions
Retracements are brief periods when a security's price trend reverses. Even in a bull market, stock values may fall. Even when the overall trend rises, there may be shorter periods of modest drops.
Some investors buy during bull market retracements. Assuming the bull market continues, the security's price will quickly rise, giving the investor a discounted purchasing price.
Swing Trading
Full swing trading is a trading technique to designed to profit from short period of time doing a bull market. Investors following this strategy will use a variety of short-term strategies to maximize gains in a bull market.
Bullish Market
The most productive bull market in modern American history ended with the dotcom implosion in 2000. During this secular bull market, the DJIA returned 15% annually.
The tech-heavy NASDAQ grew from below 800 to over 2,400 between 1995 and 2000.
After 1982-2000's bull market, a bear market ensued.
From 2000 through 2009, the market returned 1.16 percent annually. 2009 began a 10-year bull market.
The last bull market began on early 2009, and picked at the of 2021. It was dominated by technology stocks
2022 has been a bear year.
2023 is expected to be a soft-landing recension year.