You are talking about bear and bull market which not many people know. Let me tell you something about these two.
What is a bear market?
A bear market is a period of months or years during which the price of securities falls steadily. Beer market is a term commonly used in the stock market. But it can also describe specific sectors such as foreign exchange, bonds or real estate. In the bear market environment, sales growth and short sales are frequent. At the bear market level, investing can be risky even for the most seasoned investors.
Many investors choose to sell their stocks during bear market for fear of further losses, thus igniting a vicious cycle of negativity.
What causes a bear market?
A bear market occurs when there are more sellers than buyers. In a bear market, for example, sellers supply, while buyers demand. So, when the market is in recession, the number of sellers is higher and the number of buyers is comparatively less.Circumstances that make up the bear market: Some of the main conditions that make up the bear market are: a rapid rise in inflation, high unemployment rate, an economy that is entering a recession.
[size=20p]What is a bull market?
A bull market is a time where stock prices rise. This is when the value of an investment increases over an extended period of time. The term bull market is commonly used to describe securities, such as stocks, commodities and bonds. Sometimes it can also be used for investment like housing. Investors buy a lot of stocks at the bull market because they expect the stock price to rise and they will be able to make a profit by selling again.
3 drivers of a stock bull market.
1. Top-line income should grow as fast as top-line income. Economy is measured by nominal GDP. It reflects the demand for products and services from consumers.
2. Profit Profit is how much top revenue has been generated in profit for the company.
3. P / E Ratio The P / E ratio is the amount of additional stock that investors are willing to pay for each dollar.