Bull Markets This refers to the financial market of a group of traded securities’ prices are rising or expected to rise for extended periods. Securities, especially equities also held in mutual funds and ETFs, can benefit from a bull market for months or even years. Yet they are difficult to predict. Looking over the years, they occur when stock market valuations rise by 20%, usually after a drop of 20%.
Signs of a Bull Market
- the economy is strengthening or is already strong
- strong gross domestic product (GDP)
- less unemployment
- investors eager to invest by buying securities held also in mutual funds
- positive demand for equity investments increase
Bulls versus Bear Markets These animal terms metaphorically define the movement of a market. If the trend is aggressively up, it’s a bull market. If trending down, it’s a bear market. Both looming markets may be only hinted at before an economic cycle takes hold.
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Taking Advantage of a Bull Market Investors who want to benefit from a bull market may take advantage of rising prices – though it’s hard to predict when a market will peak. These graphics indicate the past bull markets: