What is a Bull Market, and How does it Affect Investments

A bull market doesn’t have any one specific definition, but the general idea is a significant increase of the stock market of an extended amount of time. Stocks can fluctuate often, as is the nature of the stock market, but to be considered a bull market, it is generally accepted that 80% of all stocks rise considerably – at least 15-20%. You may wonder what would cause such a variation, and the answer is usually the economy. A better economy causes lower unemployment, higher spending, and companies almost always do better, which increase stocks. Other factors definitely are considered, but economy seems to have the largest influence.

What does a bull market mean for the investors? If you can time it right, there is great money to be made in a bull market. By buying stocks before they rise too high and selling as they reach their peak, a lot of return can be expected. However, this is easier said than done.  The stock market is unpredictable at best, and can be near impossible to anticipate.

There are things to look out for when trying to map out the correct times to buy and sell your stocks during a bull rise. Watch for “dips” in the surge of prices. This can be a great time to buy shares, if you were unable to catch the rise in the beginning. Of course, there is always the chance that “dip” turns out to be the beginning of the inevitable downfall, so it can take a trained eye or good luck to catch it at just the right time.

Another thing to consider is that most investors, especially experienced ones, will fight for a good trade or sell in this market. Some hold on to their shares for dear life, some are a little more liberal with their trades, but you can be sure the market will be active in this time period.

All in all, the bull market can be a great time to make a substantial amount of money, if you are willing to take the risk. Do your research, consult your broker if you have one, and make informed decisions, and you may be lucky enough to thicken your investment earnings and portfolio.

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