Stock markets are largely about changing trends that sometimes hard to predict. This is where stock market pros use their own terminology to following such trends. Though there are lots of terms being used for this, one popular term is “bull vs. bear”. In simpler terms, a bull market symbolizes longer sessions, or months of upward moving stock prices, whereas a bear market means prolonged sessions of downward stock prices, which can be usually 20% or more.
One of the widely famous tales about the bears and bulls comes from the point that the two animals attack their target. When a bull attacks, it moves its horns up into the air, whereas a bear sometimes attacks fear and digs down. If you are associating with the best stock broker in India, it is necessary to have a basic knowledge about this famous terminology.
Now it gets clear that a bull market means that the market is going up and looks positive whereas a bear market means it is going download and may incur losses. This is why we often come to know when people say that market is getting bullish.
Major signs of a Bull Market
The three major gauges of a bull market are given below:
1. Gross Domestic Product (GDP) of the Country Surges
If the GDP of a country is going up that it was earlier, it means consumers are spending more which is a clear sign of growing economy.
2. Increase in Stock Prices
When the price of the stock goes up, more people show confidence that the market will cease to move up in near future and most major indices will also increase consequently.
3. Employment Rate in the Country Goes Up
A positive economy means sustainable growth in businesses which also indicates that more number of people are working. More people will have job in a bull market.
A bull market generally indicates a large number of positive growth opportunities for investors, because stock prices are on the upside.
But it doesn’t endure and doesn’t always give advance notice of its entrance, so the investor must know when to buy and when to sell stocks. Even, the top 10 stock brokers in India give recommendations on the basis of the term “Bear vs. Bull”.
A bear market is just the opposite of Bull Market. It is a kind of negative indicator for the economy. In this case, people feel low in confidence with respect to GDP, economy and jobs. They are more likely to sell stock during bear phase.
There are two big indicators of a Bear Market
- Declining stock prices
One clear and evident sign of a bear market is the reducing stock prices for longer periods of time. If the investors notice prolonged reduction in stock prices, they prefer to sell stocks.
2.Economy downgrading
Yes, in case of Bear market, investors lose confidence in stock market which further weakens the economy.
What do investors do in case of Bear market?
Here are few suggestions that could help investors sustain the downward trend.
Think long-term: One of the poor things one can do in a bear market is make illogical reactions to market trends. The average investor meaningfully underachieves the overall stock market over the long run, and the most crucial reason is moving in and out of stock positions too rapidly. When stocks go down and appear like they are meant to go down more, it's natural to sell "before things turn any worse." It's quite evident that the primary goal of investing is to buy low and sell high, but by responding ardently to market trends, situation is more likely to turn worse. Invest in stocks that you want to hold for longer durations, and don't sell them just because their prices are going down in a bear market.
Don't chase the bottom: Trying to predict the market is usually a never ending battle. One thing to keep in mind during bear markets is that you aren't going to invest at the bottom, and always use fast and best trading platform in India for investment. Buy stocks because you want to own the business for the long term, even if the share prices go down a bit more after you make a purchase.
