Bull Markets Are Your Friend

By Mike Swanson

Bear market or bull market are terms often used in conjunction with financial markets. They describe the general trend of a market. Individual shares may go up or down during a day or even over a period of time, but the entire market also follows patterns. Many analysts have rules around what period they make market analysis over and the percentage rise or fall they consider indicates a market movement.

A Bull Market is one where the overall stock market in rising in value. The swing to a rising market occurs after it has fallen a long way and things were looking rather negative. Take a look at gold stock picks for example. When the bull market comes after such a period investors feel they can make money.

A bear market on the other hand is one where there is a constant decline in stock prices.

One of the most memorable bear markets in recent history followed the stock market crash of 1929. In the three years that followed nearly 90% of stock values were wiped out. But obviously things did improve.

The patterns seen in a bear market tend to be a very big initial drop in values, which pushes a lot of the speculators out of the market. This is followed by a temporary period of stock price increases before the market starts to decline again over a longer period.

But bull and bear markets are a cycle and one follows another. The problem is that there is no guarantee when the change will come or how long the patterns will last. It is easy to identify in retrospect, but much harder predicting the future.

For many people the idea that markets have cycle is forgotten. One can make money in both a bear and a bull market. - 23196

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