Difference Between A Bull and Bear Market

The world of finance has been somewhat dropped on its head. Between unforeseen market fluctuations, the rise in https://robinhood.com/, peak interest in cryptocurrencies and so many other things, investing has never been so appealing to so many people.

But is it the best time to invest? And if so, what are the things you should know first? Let’s start with markets and some basic terminology to pick up so you can talk it up with some of the big moneymakers!

What’s a Bull Market?

A bull market occurs when consumer confidence is at a high point. This happens when stock prices are rising or are at inherent high points that work to perpetually fuel the already existing investor confidence. When people are looking to spend (and many of them get a return when they do so), we often end up with a bull market.

Oftentimes significant historical events, such as the economic boom following World War 2 and the official end of the Great Recession end up sparking bull markets. Ultimately a bull market is when you want to try your luck and strike gold. But be wary because other investors are trying to do the same thing. Consider working with a decorated investment firm before putting too much of your hard-earned cash into the unpredictable pit we call a stock market!

What’s a Bear Market?

A bear market occurs when stock prices drop by at least 20%. So as you may expect, during a bear market, investors are basically in defense mode. On one front, consumer confidence is compromised, leading to a “safe” feeling to sell, while some turn optimistic and always on the lookout for that golden opportunity to buy low and eventually sell high to make a nice profit.

Given the unbelievable complexities of our global economy, which finds ways to both, directly and indirectly, affect the stock market, there’s no one true cause for a bear market. However, more times than not, bear markets are enacted due to a lull in the economy – sometimes driven by an uptick in unemployment. This often causes people to sell (rather than buy), thus, leading to a decline in stock prices. For many, it usually comes down to predicting the shift between the two markets to find that “sweet spot” of a stock price. Easier said than done!

Bottom line: bear markets are a sellers’ market.

What You Need to Know

Fluctuating markets can give investors some insight on what the next move to be, but nothing is for certain. If there’s one thing seasoned investors have learned over the years, it’s not to blindly listen to what the “gurus” are telling you. After all, most of them want to be the pens investing your money and taking a cut anyway!

So when investing your hard-earned money, get a feel for industry trends, thoroughly read charts, make calculated risks and only invest what you’re willing to lose. Oh, and one more word of advice? Enjoy what you’re doing, have fun with it! And know there are other https://www.newyorklife.com/.