If you are new to the investing world, the terms “bull” and “bear” might piss you off because you don’t know what they mean.
These terms bull market and bear market or bull vs bear market are used to describe how the stock markets are doing in general – that’s whether the market is rising or falling in value.
And as a broker, trader, or investor this rise and fall of market value (price index) do mean a lot of you.
So it is important for you to know when the bull Is coming. Because the bull market and bear market conditions may impact your investments.
With that said, as an investor, you don’t want to miss investing in the bull market, because you are going to make so much profit.
That is why you everyone is eager for the bull market day.
But then, not all rise in the value of stocks can be characterized as a bull market though because sometimes a market may go stagnant and then trying to find its direction.
So far so good, in this guide, you are going to learn what the bull market and the bear market means, and their characteristics.
And if you read to the end, you will discover the secret to profit in a bull and bear market.
What is Bull Market and Bear Market
A bull market is a prolonged market period in which an investment has prices that rise faster than the historical average.
In essence, a bull market signifies a healthy economy, where there’s a job opportunity, growth, and development, and people have more money to spend and are interested in spending this money in stocks.
So as they have the mindset of buying stocks, the value of stocks then increases due to the demand it is receiving.
Also, a bull market will come, when investors have the sentiment that the market will rise, and then they begin to invest their money in the stock market in turn it will create a massive demand for stocks and the value will rise due to this demand.
A bear market is a prolong market period in which an investment has prices that fall.
Typically characterized by a stock market that has fallen at least 20% from its previous high.
In essence, a bear market signifies a weak economy (bad economy), where there’s a scarcity of jobs, growth, and development and people are now no longer interested in buying stocks, and this decreases the demand for stock which in turn causes the value to decrease.
Also, a bear market will occur when investors have the sentiment that the value of the stock will depreciate, and so they decide to move their money away from stocks to equities and into fixed income securities as they wait for a positive signal in the stock market.
Understanding Bull vs Bear Market
It is likely as an investor you will encounter the bull and the bear market over the years of your investment career. And the best you can do is to invest in both of them.
When the price of stocks is all down Red up to 20% know that the economy has run into the bear market, and if it rise above 20% know that the economy is on the bull market.
Always remember to invest in the RED (bear market) so that you will enjoy in Green (Bull Market).
Should You Invest in the Bull vs Bear Market
Yes. You should invest in both.
A bear market ( when all the prizes have fallen below normal) can be an opportunity to build wealth on a long term while waiting for the bull market.
While a bull market may be a get rich quick opportunity, but then you can’t predict when or how the bull market will come.
Have you heard of the story of the first man to pay who bought two pizza with 10, 000BTC ten years back?
Meet Laszlo Hanyecz First Man to Buy Commodity with Bitcoin
History has it that Laszlo Hanyecs is the first person who used Bitcoin in a commercial transaction.
If we go back in time on May 22, 2010, when Bitcoin was about 1 year old, Laszlo Hanyecz bought two pizza for 10, 000BTC value as at then was $45 but. The day is now celebrated as “Bitcoin Pizza Day”.
It sounds like a joke, but then in reality, if Laszlo Hanyecz had an idea that 1 BTC would later worth more than $10, 000 in few years to come he would have to hold it for long.
How to Make Profit from a Bull Market
Investing in the bull market is easy and straight forward.
The economy is good and the prizes of stocks are also high in value, and when you buy within a short while you sell and make your profit because people are willing to invest their money in stocks.
The only problem is that no one can predict when the bull market will come, and how much they will last.
So while the economy is on the bull market, trade, do business, make money, and above all always prepare for the bear market strike so you won’t be taken unaware.
How to Make Profit From a Bear Market
Like said earlier, the bear market may be an opportunity for you to build wealth over time since you get to buy more on low market capitalization.
Your investment goal on the bear market is to build a long term investment portfolio (Always buy when the market is red, so when it goes green you profit).
And investing your money over the decades has been the fruitful strategy of average investors who aren’t chanced to keep a check on the current market capitalization of their stocks.
So if you had bought stocks when the value was around $10 per stock and then the value then falls to $5 per stock, still buy.
It is because you are not loosing in the real sense, there is a tendency that the value will rise twice as tall.
You will only lose when you decide to sell.
With that you should continue to invest in the bull vs bear market, but on your personal risk tolerance.
The bull vs bear are terminologies used to describe the current state of the economy.
It is coined from the behavior of these respective animals fighting attitude.
And as an investor, you will continue to encounter a series of bull vs bear market.
But then, whether the market is on the bull or the bear, there is so much profit to make if you strategize.
The key is to stick towards long term investing.
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