Understanding Bull and Bear Markets

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"I think that our fundamental belief is that for us growth is a way of life and we have to grow at all times.
" -Mukesh Ambani One of the most confusing parts of the stock market are the terms used to describe it.
The motion of the stock market is usually defined in terms of bull and bear markets.
Many people use these terms and almost no one can define what they mean or where they came from.
The motion of the stock market is extremely important in making investment decisions and is a major factor in how well your stocks will perform.
It is important to note that the use of bear and bull are used in two separate ways by investors.
The first way in which they are used is to actually define the real motion of the stock market.
These technical terms reflect if the stock market is increase or decreasing.
However, investors will also use these terms to refer to how they 'feel' the stock market is performing.
When these terms are used that way, it is not a factual statement but one based on opinion.
Bull Market.
A bull market is when the stock market is increasing.
This is when stock prices are constantly increasing over an extended period of time.
Most financial experts believe that once prices of stocks will rise they will continue to rise and this is an indication of a strong national economy.
When a nation's economy is strong unemployment is usually decreasing and the people who want jobs are working.
This type of condition is named after how the bull attacks it's victims.
Bulls will push their horns up into the air, symbolizing the increase in stock prices.
In a bull market investors should buy up stock options they are interested in as the bull market starts and then sell their stocks just before the stock prices being to fall again.
Obviously, the tricky part is in predicting when prices will fall.
Investors usually make their profits in the bull market.
Bear Market.
A bear market refers to when the stock market is decreasing.
Stock prices continue to fall over an extended period of time.
The national economy, duringbear market, slows down and unemployment increases as corporations are forced to reduce their work forces.
The term 'bear' is used to refer to this condition because of how bears will paw at it's victims in a downward motion.
This symbolizes the downward motion of the stock market.
Investors usually lose money in the bear market.
It is suggested that investors, during a bear market, invest in utility stocks which are usually unaffected by changes in in the stock market.
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